Alphabet, Google’s parent company, is getting ahead of Apple on Wall Street lately. Alphabet’s shares have gained 27.54% over the last twelve months and 171.64% over the last five years, compared to 18.54% and 137.93% of Apple over the corresponding periods.
That’s a big shift from the old days (longer than five years), when Apple was well ahead of Google—see table 1.
Table1
| Company | 12-month Performance | 5-year Performance | Max Performance | Forward PE |
| Apple | 18.54% | 137.93% | 14,620.90% | 11.91 |
| Alphabet | 27.54 | 171.64 | 5,331.74 | 21.38 |
Source: Finance.yahoo.com 2/9/18
What’s behind this change in fortunes of the two leading technology leaders? Google’s innovation edge over Apple. Alphabet scores 95 in Drucker’s Institute 2017 Most Effectively Managed U.S. Companies list, close to 5 points higher than Apple—see table 2.
Table 2
| Rank | Company | Customer Satisfaction | Employee Engagement and Development | Innovation | Social Responsibility | Financial Strength | Effectiveness |
| 2 | Apple | 64.2 | 61.8 | 90.9 | 61.5 | 99.5 | 88.4 |
| 3 | Alphabet | 62.6 | 82.0 | 95.0 | 60.8 | 71.0 | 86.7 |
Source: Drucker Institute
To be fair, Apple is ranked slightly above Google in the Drucker’s Institute list, but that has to do with Apple’s financial strength, which may not last if the company fails to keep up with innovation.
Alphabet’s innovation lead over Apple can be further attributed to the company’s ability to better engage employees. Alphabet’s Employee Engagement and Development Score is 82 vs 61.8 for Apple—see table 2.
Alphabet’s ability to engage employees is also reflected in a number of best employer lists, where the company receives top scores, ahead of Apple.
Alphabet ranks number 1 on Forbes’s World’s Best Employers list, number 1 on Fortune’s Best Companies to Work For, and number 5 on Glassdoor’s Top Places To Work For—see table 3.
That beats Apple, which ranks number 4 on the Forbes list, number 84 on Glassdoor, and is nowhere to be found on Fortune’s list.
Table 3
| List | Google’s Ranking | Apple’s Ranking |
| Forbes’s World’s Best Employers (2017) | 1 | 4 |
| Fortune’s Best Companies To Work For (2017) | 1 | -- |
| Glassdoor’s Top Places To Work For (2018) | 5 | 84 |
When a technology company makes it to the top ranks of one of the lists of best employers, it could be just an accident. When it makes it to two such lists, that’s an indication that it treats its employees right. When it makes it to three such lists, it must be keeping its employees happy.
And keeping employees happy is very important for technology companies, as they rely on talent to innovate and gain an edge against their competitors over the long-term on Main Street and Wall Street.
