Mountain View, California-based Alphabet Inc. (GOOG) is a multinational technology conglomerate holding company offering various products and platforms. With a market cap of $2 trillion, GOOG provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and GOOG definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the internet content & information industry. Alphabet continues to innovate, focusing on AI and cloud computing. The company plans to increase capital expenditures to support growth in these areas, ensuring it stays ahead in the technology race and diversifies revenue streams beyond advertising. This forward-thinking approach solidifies Alphabet's long-term market position.
Despite its notable strength, Alphabet slipped 20.3% from its 52-week high of $208.70, achieved on Feb. 4. Shares of Alphabet declined 13.8% over the past three months, trailing behind the Nasdaq Composite’s ($NASX) 9.1% dip during the same time frame.
In the longer term, shares of Alphabet dipped 12.7% on a YTD basis, underperforming NASX’s YTD losses of 7.9%. However, the stock climbed 11.8% over the past 52 weeks, outperforming NASX’s 8.4% returns over the last year.
To confirm the bearish trend, Alphabet has been trading below its 50-day moving average since early February. The stock is trading below its 200-day moving average since late February.
Alphabet's success is due to its recent quantum computing breakthrough in December 2024. While Google Search remains a key revenue driver, the company is investing in AI to enhance search capabilities and strengthen its position in cloud computing, AI, and robotics. The focus is on growing the Google Cloud Platform (GCP) and expanding its advertising business. With deep cash reserves, Alphabet recently announced a $32 billion deal for cloud security firm Wiz, showing its commitment to strategic investments. Google Cloud is growing rapidly and has the potential to close the gap with cloud leaders Microsoft Corporation (MSFT) and Amazon.com, Inc. (AMZN). Moreover, by leveraging AI technology, Alphabet aims to drive demand and further accelerate growth.
On Feb. 4, GOOG reported its Q4 results, and its shares closed down more than 6% in the following trading session. Its revenue stood at $96.5 billion, up 11.8% year over year. Its EPS increased 31.1% year over year to $2.15.
In the competitive arena of internet content & information, Meta Platforms, Inc. (META) has taken the lead over Alphabet, showing resilience with a 1.8% uptick on a YTD basis and a solid 17.4% gain over the past 52 weeks.
Wall Street analysts are bullish on GOOG’s prospects. The stock has a consensus “Strong Buy” rating from the 51 analysts covering it, and the mean price target of $217.90 suggests an ambitious potential upside of 31.1% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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