Google’s parent firm is set to overtake Apple as the world’s most valuable company by market value after its latest revenues smashed expectations.

Alphabet’s share price rose almost 5 per cent in after-hours trading following the release of its fourth quarter and annual results which, if repeated when the markets reopen for trading on Tuesday, should easily take it to the top of the corporate pile.

The rise would put Alphabet’s value at $549bn (£382bn) compared to Apple’s market capitalisation of about $534bn (£371bn).

Google’s owner reported a 17.8 per cent increase in quarterly revenue to $21.3bn – crediting strong advertising sales on mobile devices and YouTube.

The results suggest the self-driving car project is losing Google money

Sky News reports that profits for the three months to the end of December came in at $4.9bn – a rise of 5% on the same period last year.

That was despite its raft of experiments, or ‘moonshots’, collectively racking up operating losses of $1.2bn in the quarter.

While Google did not list the financial progress of each one, they include its driverless car, glucose-monitoring contact lens and Internet balloon projects – the latter, known as Project Loon, aiming to deliver connectivity to areas of the world without it from a network of balloons.

Ronald Josey of JMP Securities told the Reuters news agency investors would excuse those losses: “As long as the core business continues to operate well with accelerated revenue… investment in those businesses can continue,” he said.

Google remains the core earner – with its advertising revenue rising almost 17 per cent to $19.1bn, aided by 31 per cent growth in paid clicks.

While this was the first time Alphabet had reported consolidated results, its statement showed it paid an effective tax rate of 5 per cent – down from 18 per cent in the same period last year.

It is just over a week since the Government claimed a victory after securing a multi-year corporation tax payment from Google of £130m – only for the payment to later attract claims of sweetheart deals.

The company said the drop in its effective tax rate reflected the “impact of certain one-time items in the US”.