California-based Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG) on Tuesday became the fourth publicly-traded United States company to hit the $1 trillion market capitalization.
The Google parent company joined fellow tech giants Apple Inc. (NASDAQ: AAPL), which crossed the mark in August 2018, and Microsoft Corporation (NASDAQ: MSFT), who joined a year later in August 2019.
Seattle-based e-commerce behemoth Amazon.com Inc. (NASDAQ: AMZN) briefly joined the club in September 2018, but has since slipped to $931 billion.
The Saudi Arabian Oil Company, or Saudi Aramco, overtook Apple as the world’s most valued company in December after raising a record IPO. Aramco is valued at $1.84 trillion, crossing the $2 trillion mark briefly last month.
China’s state-owned PetroChina Company Ltd. (NYSE: PTR) was the world’s first company to cross $1 trillion in market cap in 2007, but things went downhill soon after.
Alphabet Seeing Rapid Growth
Alphabet took 47 trading days to reach $1 trillion from $900 billion, according to the Dow Jones Market Data reported by the Wall Street Journal.
This is the fastest that the company has ever made $100 billion. The company grew from $800 to $900 billion in two years, the data shows.
The increase in growth pace comes as Alphabet posted a 22% year-on-year growth in revenue in the third quarter of 2019, with revenue from advertising and cloud computing on the rise.
The revenue from the cloud business doubled, reaching $2 billion by July 2019 from February 2018, CNBC noted.
Alphabet is expected to post the fourth-quarter results after the market’s close on February 3, and analysts are expecting the company to post $46.9 billion in revenue, up 19.5% compared to the same quarter last year.
The fourth-quarter results will be important to Alphabet, as it faces increased pressure to justify its valuation after joining the trillion dollar club.
Pichai Inspires Investor Confidence
According to the Journal, the company’s investors have also expressed greater confidence in Sundar Pichai, who took over as the conglomerate’s CEO in December, when founders Sergey Brin and Larry Page stepped down from managerial roles.
Most of Pichai’s additional earnings, who gets a $2 million paycheck, are tied to the company’s stock performance, as a filing with the Securities and Exchange Commission last December had shown.
This could mean that Pichai might increase share buybacks or institute a dividend payment for the first time in Google’s history, the Journal noted.
Alphabet’s Class A shares closed 0.76% higher at $1,450.16 on Thursday. The shares added another 0.28% in after-hours trading.
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