Apple is no longer the world's most cash-rich company

Apple is no longer the company with the most cash in the account when it is overtaken by Alphabet, Google's parent group.

Alphabet - Google's parent group has officially surpassed Apple to become the world's largest cash reserve company. The amount of cash and mobile assets of Alphabet after the last quarter reached 117 billion USD, far exceeding Apple's 102 billion USD.

However, according to the Financial Times, this "king of cash" title is not necessarily a positive thing. Having too much reserve can be a pressure for the shareholders of the company to ask Alphabet to spend more money to pay dividends or buy back shares, and can also make Alphabet and Google more scrutinized by US lawmakers.

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Alphabet's cash reserves have grown rapidly over the past two years, although it has spent a lot of money buying real estate.

In the past 2 years, Google has been fined up to 9.05 billion USD by the EU for its monopoly in business. The company is also being investigated by MPs in the US Congress.

From $ 163 billion in 2017, Apple has continuously paid dividends to investors and adjusted its business in its branches, making cash flow decline rapidly. After only two years, Apple's cash reserves have dropped by $ 61 billion. Also during that period, Alphabet increased by $ 20 billion in cash reserves despite investing heavily in real estate to build offices and data centers. According to Financial Times, Alphabet accumulates to invest in penetrating new markets, instead of dividends like Apple.

"In general, the fact that they reinvest in other areas is not very successful. I hope they pay dividends to investors rather than spending money," said Walter Price, manager at Allianz Global Investors. Ruth Porat, Alphabet's CFO, explained that Google's investment in real estate is completely normal because it is a one-time investment. Mr. Porat said 70% of Google's investment costs in each quarter are usually for servers and other devices.

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Much of Google's operating costs are invested in data centers.

Youssef Squali, an analyst at SunTrust Robinson Humphrey thinks building the infrastructure to meet the artificial intelligence products that Google is developing will be very costly. Google and Alphabet's sales are still mostly from search engine advertising, while other services such as cloud computing, hardware, and smart home devices are all considered to be unprofitable. That makes investors worried.

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The Verge identifies the next target of Google and Alphabet may be the title "the world's most valuable company". In August 2018, Apple reached a milestone of $ 1,000 billion, becoming the first technology company to reach this figure. However, Apple's stock price has fallen after that and now is surpassed by Amazon and Microsoft in terms of market capitalization.

By: Joshua Thompson

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