Alphabet Earnings Rally Could Catapult It Into the Market Value Lead

(Bloomberg) -- Alphabet Inc. could be one good earnings report away from becoming the world’s most valuable company.

Options set to expire on Friday are pricing in an implied move of 4.5 percent when the Google parent reports fourth-quarter earnings after markets close on Monday. That would vault Alphabet past Microsoft Corp., the current leader with a market value of $811 billion, according to Bloomberg data. Alphabet had a market value of $789.9 billion, as of 3:12 p.m. in New York.

After lagging Microsoft and Amazon.com Inc. for months, Apple Inc. briefly regained its crown on Monday. Disappointing iPhone sales have weighed on Apple’s shares, causing the company’s market value to plummet more than technology peers. Despite a recent rally fueled by optimism following its fiscal first-quarter earnings report, the stock is down 26 percent from a record high in October. That translates into more than $300 billion in lost market value from a peak of $1.12 trillion.

Alphabet’s implied move is larger than the historical average of 3.5 percent over its last eight earnings reports, and the rallies after earnings have been evenly split with declines. About 10 percent of total open interest is set to expire on Friday and implied volatility is on the higher side at 53 percent, compared with a three-month average of 35 percent.

To contact the reporters on this story: Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net;Gregory Calderone in New York at gcalderone7@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Courtney Dentch

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