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Alphabet has dethroned Apple, but maybe not for long

Eras change slowly—then seemingly all at once. So now that Google parent Alphabet (GOOGL) has displaced Apple (AAPL) as the nation’s most valuable company, it’s tempting to declare the reign of Steve Jobs and Tim Cook officially over.

Not likely. A review of the most valuable companies of the last 50 years shows a lot of jockeying for the top spot, with some companies losing the mantle only to regain it a year or two later. The winds of change invariably sweep some companies aside for good, but well-run businesses also adapt and regain their footing. Here’s the market capitalization of the nation’s most valuable company each year since 1968:

Trends we’re all familiar with are apparent in the rankings. IBM (IBM) was a corporate powerhouse following World War II, expert in industrial technology such as the mainframe, followed by the personal computer. But IBM lost its way as America’s manufacturing sector waned and the service sector grew, and IBM forfeited the top spot for good in 1992.

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Exxon became a huge energy conglomerate in the 1980s, merging with Mobil in 1999 to become a true giant, Exxon Mobil (XOM). With revenue more volatile than most companies its size, Exxon’s value soared during oil booms and fell during busts.

Microsoft (MSFT) rode the digital revolution to the top spot in 1999, then dropped back following the dot-com bust of 2001. The company proved its resilience, however, by reclaiming the No. 1 spot in 2003. Today, it’s the third most valuable company, behind Apple and Alphabet. Not too shabby.

General Electric (GE) reached the head of the class in 1994 thanks to its expansion into financial services. It repeated nine times. The same business line nearly undid the company during the 2008 financial wipeout, however, since GE ended up heavily exposed to bad debt, requiring federal aid to survive. GE is now much smaller, with a market value about 38% lower than its peak in 2001.

Exxon was a reliable profit machine from 2007 to 2012, as most of the world experienced a nauseating depression in stocks followed by a long bull market. But Silicon Valley claimed the top spot for the first time in 2011, when Apple briefly dethroned Exxon. The two companies jockeyed for No. 1 during the next couple of years, with Apple finally bumping Exxon decisively in 2013. (Since the numbers in the table above reflect market value on Jan. 1 of each year, they don’t show month-by-month changes.)

Now it’s Alphabet’s turn. The search company’s share price has soared by nearly 48% during the last year, while Apple’s stock has dropped by 19%. Both companies are enormously profitable, but investors seem to think Apple’s future growth will be limited, while Alphabet still has plenty of headroom. They may be right, but supervaluable companies don’t fade easily. The reason they got to No. 1 is often the reason they get there again.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.