Microsoft suffered a blow to its prominence and collective ego earlier this year when Apple surpassed it in market capitalisation, making Apple the most valuable technology company in the world. Google could be next in line to leapfrog Microsoft.
After reporting blowout Q3 earnings this afternoon, Google’s stock has surged almost 9% in after hours trading, bringing the company’s market cap to about $188 billion. That’s well within striking distance of Microsoft’s market cap of about $218 billion.
Specifically, assuming the number of outstanding shares of both companies remains static, and Microsoft’s share price remains flat, then Google needs only another 16% bump to surpass Microsoft’s market cap and become number two.
But hasn’t Google’s stock been priced a lot higher? Well yes, it topped out at over $700 a share in late 2007. But Microsoft’s stock was a lot higher then too, moving between $34 and $36 per share. This year, Microsoft’s stock has been stuck in the low to mid 20s, and unless the company comes up with a big surprise on its quarterly earnings call on October 28, I don’t see much of a rise, and neither do the Wall Street analysts who cover the firm.
Apple, meanwhile, is way up in the stratosphere with a market cap around $276 billion.