Is Google’s share price about to crash?

Could be about to follow Apple.

Following the poor performance of Apple shares over the past 8 months, many investors are starting to wonder if Google shares are about to follow a similar fate.

Apple’s share price has dropped from over US$700 in September 2012 to US$440 in May 2013. Over the same period, Google’s share price has increased from less than US$700 to over US$900.

What lies Beneath

Apple shares now trade a relatively low multiple for a tech company. The company currently has a trailing PE ratio of 10.5x and a forward PE ratio of 9.9x (for year-end 2014). This shows that the market expects little further growth from the company after 2014.

On the other hand, Google is valued highly. It trades at 27x earning on a trailing basis and 17x on a forward basis.

The Steve Jobs factor

There is no doubt that Steve Jobs was a revolutionary thinker. His multiple successes at Apple and Pixar are testament to that.

When he died, many felt that Apple would struggle immediately. However, these fears were quelled as Apple’s share price rose strongly. When Jobs died in October 2011, Apple share price was at US$400. Then, following a few months of static growth, the share price rose steadily to reach its peak of US$705 in September 2012.

The share price then declined heavily, dipping to as low as US$390 in April 2013, before recovering to US$440 in May 2013.

Why has this happened?

There are a number of possible reasons for this decline, including:

  • Apple’s upcoming products lack the enthusiasm they had under Jobs and although their previous products remain market leaders, they now face strong competition from the likes of Samsung, Google and Amazon.
  • Now that a couple of years have passed many of the best ideas that Jobs put in place – the ipod, the iphone, the ipad - have been used up and any new products going forward will have to be ones that he was not involved with. While there is no disputing that Apple still has a great design team led by Jonathan Ive, they perhaps lack the final decision over which new product to go with. Steve Jobs was notoriously difficult to argue with and that was surely one of his greatest strengths in pushing through products he liked.
  • With Jobs gone, Apple’s rivals sense blood. They know that Apple’s x-factor is gone and have therefore been more keen to innovate themselves. In short, the fear that Apple will always be two steps ahead is gone.

In closing, Apple’s core consumers loved Steve Jobs. They went wild when he gave his speeches in his turtle neck at product unveilings. They lined up to meet him. They slept on the streets outside Apple stores to be the first to get their hands on his latest gadgets. They miss him… and the market has finally started to realise it.

Google, on the other hand, is a different story.

Photograph: Getty Images

Andrew Amoils is a writer for WealthInsight

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In her first interview of 2017, I pressed the Prime Minister for Brexit clarity

My week, including running out of cat food, reading Madeleine Thien – oh, and interviewing Theresa May on my show.

As the countdown to going live begins in your ear, there’s always a little rush of adrenalin. Especially when you’re about to launch a new Sunday morning political programme. And especially when you’re about to conduct the Prime Minister’s first interview of 2017. When you hear the words, “Cue Sophy,” there’s a split-second intake of breath – a fleeting moment of anticipation – before you start speaking. Once the show is under way, there’s no time to step back and think; you’re focused on what’s happening right now. But for that brief flicker of time before the camera trained on you goes live, you feel the enormity of what’s happening. 

My new show, Sophy Ridge on Sunday, launched on Sky News this month. After five years as a political correspondent for the channel, I have made the leap into presenting. Having the opportunity to present my own political programme is the stuff that dreams are made of. It’s a bit like having your own train set – you can influence what stories you should be following and which people you should be talking to. As with everything in television, however, it’s all about the team, and with Toby Sculthorp, Tom Larkin and Matthew Lavender, I’m lucky enough to have a great one.

 

Mayday, mayday

The show gets off to a fantastic start with an opportunity to interview the Prime Minister. With Theresa May, there are no loose comments – she is a cautious premier who weighs up every word. She doesn’t have the breezy public school confidence of David Cameron and, unlike other politicians I’ve met, you don’t get the sense that she is looking over her shoulder to see if there is someone more important that she should be talking to.

In the interview, she spells out her vision for a “shared society” and talks about her desire to end the stigma around mental health. Despite repeated pressing, she refuses to confirm whether the UK will leave the single market as it leaves the European Union. However, when you consider her commitment to regaining control of immigration and UK borders, it’s very difficult – almost impossible – to see how Britain could remain a member. “Often people talk in terms as if somehow we are leaving the EU but we still want to kind of keep bits of membership of the EU,” she said. “We are leaving. We are coming out. We are not going to be a member of the EU any longer.” Draw your own conclusions.

 

Women on top

This is probably the kind of thing that I should remain demurely quiet about and allow other people to point out on my behalf. Well, screw that. I think it’s fantastic to see the second female prime minister deciding to give her first interview of the New Year to the first woman to front a Sunday morning political show on television. There, I said it.

 

Escaping the bubble

In my view, every journalist should make a New Year’s resolution to get out of London more. The powerful forces that led to the political earthquake of 2016 came from outside the M25. Every week, I’ll be travelling to a different part of the country to listen to people’s concerns so that I can directly put them to the politicians that I interview. This week, it was Boston in Lincolnshire, where the highest proportion of people voted to leave the European Union.

Initially, it was tricky to get people to speak on camera, but in a particularly friendly pub the Bostonians were suddenly much more forthcoming. Remain supporters (a minority, I know) who arrogantly dismiss Leave voters as a bunch of racists should listen to the concerns I heard about a race to the bottom in terms of workers’ rights. Politicians are often blamed for spending too much time in the “Westminster bubble”, but in my experience journalists are often even worse. Unless we escape the London echo chamber, we’ll have no chance of understanding what happened in 2016 – and what the consequences will be in 2017.

 

A room of one’s own

Last December, I signed a book deal to write the story of women in politics. It’s something I’m passionate about, but I’ll admit that when I pitched the idea to Hachette I had no idea that 2016 would turn out to be quite so busy. Fitting in interviews with leading female politicians and finding the time to write the damn thing hasn’t been easy. Panic-stricken after working flat out during the EU campaign and the historic weeks after, I booked myself into a cottage in Hythe, a lovely little market town on the Kent coast. Holed up for two weeks on my own, feeling a million miles away from the tumultuous Westminster, the words (finally) started pouring on to the page. Right now, I’m enjoying that blissful period between sending in the edited draft and waiting for the first proofs to arrive. It’s nice not to have that nagging guilty feeling that there’s something I ought to be doing . . .

 

It’s all over Mao

I read books to switch off and am no literary snob – I have a particular weakness for trashy crime fiction. This week, I’ve been reading a book that I’m not embarrassed to recommend. Do Not Say We Have Nothing, by the Canadian author Madeleine Thien, tells the haunting story of musicians who suffered during the Cultural Revolution in China. It’s also a chilling warning of what happens when anger towards the elite is pushed too far.

 

Political animals

However busy and exhilarating things are at work, my cat, Ned, will always give me a reality check. In the excitement of the first Sophy Ridge on Sunday, I forgot to get him any food. His disappointed look as he sits by his empty bowl brings me crashing back down to earth. A panicked dash to Sainsbury’s follows, the fuel warning light on all the way as I pray I don’t run out of petrol. Suddenly, everything is back to normal.

“Sophy Ridge on Sunday” is on Sky News on Sundays at 10am

Sophy Ridge is a political correspondent for Sky News.

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge