The darling of the tech world, Apple, made US$18.4 billion profit last quarter. However, in the cutthroat world of Wall Street, that’s simply not good enough. Last March, Apple was valued at some US$740 billion and many were predicting that a trillion was not out reach.

Fast forward 12 months and things look very different.

 

 

By the close of trade on Monday 1 February, Apple’s value had dropped to US$534.50 billion. While that’s still very impressive number, the recent restructure of key rival, Google, into Alphabet appears to have investors very interested. Overnight Alphabet replaced Apple as the most valuable company with an overnight close of $547.80 billion.

Not only are investors loving the new, more stable look of Alphabet, but also its areas of innovation that are reaching into areas where Apple is struggling to keep pace.

 

 

First is virtual reality. Seen as the Next Big Thing of the tech sector, reports claim that despite owning a significant number of patents and acquiring companies that are already working in this space, Alphabet is already a long way down the path. A clear example is that its been Google Glass which, although poorly received by consumers, certainly demonstrated their efforts to date.

Another area where Apple is late to apply a significant amount of R&D is autonomous driving. There is constant news of Apple recruiting from Elon Musk’s Tesla, however recent reports indicate that an Apple Car may be a lot further away than Tim Cook would like.

 

 

Finally, Health Sciences are scene as the next important field for the companies, and could have a huge impact into the well-being and longevity of the population. Verily, the division of Alphabet that is dedicated to this research, demonstrates to investors the direction of the company into new and important spaces.

This is in stark contrast with Apple, who’s secretive nature gives little hope to stockholders. Last week, the company issued a forecast for their first drop in year-on-year revenue since 2003. Without Tim Cook showing a clear path to new products, the slowing of growth in China means than much of the tech investment capital may flow towards Alphabet over the next 12 months.