Another tech behemoth is poised to join the club of Silicon Valley giants valued at more than $1tn. Alphabet, Google’s parent company, reached a value of $993bn on Monday, with analysts expecting it to cross the $1tn mark soon.
Alphabet would join a select club of tech companies to pass $1tn in value. Apple became the first tech company to pass the benchmark in August 2018 and has since risen to be valued at $1.37tn.
The iPhone company was followed by Microsoft, which passed $1tn in April 2019 and Amazon, which joined the club in September. The value of Microsoft has continued to rise but Amazon has slipped back and is now worth $940bn.
The five most valuable companies in the US are now all tech companies, with Facebook rounding out the pack with a current market capitalization of $631bn.
Alphabet reports its latest earnings on 3 February and is expected to report another record quarter of advertising revenue that could easily push its share price past the $1tn mark.
The seemingly unstoppable rise of the top tier of tech companies comes even as politicians, consumer groups and regulators across the world are increasingly worried about the outsized influence of the companies on competition in their relative spheres.
Google accounted for 73% of the ad market in search in the US and 31.1% of global digital ad dollars in 2019, according to eMarketer. In the last quarter its revenues were $40.5bn, 20% higher than the same period in 2018. Alphabet had over $117bn in cash on its books last year, more than Apple which had a cash pile of over $102bn.
In December the UK’s Competition and Markets Authority released a report arguing there was a good case for introducing regulations to tackle the dominance of Google and Facebook in online advertising.
That call came as European regulators fined Google €1.5bn ($1.67bn) for abusing its monopoly in online advertising. Brussels has fined the tech company €8.2bn ($9/14bn) over two years for breaching competition rules.
Last September, 50 US states announced an investigation into Google’s “potential monopolistic behavior” and the justice department and Federal Trade Commission have both been conducting their own competition investigations into Alphabet and other big tech companies.
Michael Levine, senior research analyst at Pivotal Research Group, recently upgraded Alphabet to a buy from hold and expects the company to imminently pass the $1tn mark as the company benefits from a corporate restructuring that saw founders Larry Page and Sergey Brin step down to leave Google’s CEO, Sundar Pichai, in charge of both Alphabet and Google.
The biggest challenge the company faces are “hostile regulatory headwinds”, Levine wrote in a note to investors.