-->

Alphabet, the parent company of Google, has reached a market capitalization of $2 trillion

Bulls believe the stock will continue to rise as a result of a resurgence in digital advertising spending and expansion in the company's cloud division.

Alphabet Inc., the parent company of Google, surged Monday to surpass $2 trillion in market value for the first time, powered by a comeback in digital advertising expenditure and expansion in the company's cloud computing sector.



Its Class A shares rose as much as 1.2 percent to a new all-time high, extending the stock's recent run into a sixth trading session. Alphabet is the best-performing stock this year among the five largest U.S. technology companies based on revenue, with a 70 percent gain powered primarily by the expansion of Google's advertising division, according to FactSet.

The increase in the value of the company's stock puts it in an elite club with Apple Inc. and Microsoft Corp., the latter of which also hit the $2 trillion mark this calendar year. In January 2020, the Google parent company achieved a market capitalization of $1 trillion for the first time.




According to Kim Forrest, founder and chief investment officer of Bokeh Capital Partners, "It's only a number, but I think it illustrates that these are top firms," she said in an interview. This is truly a simple explanation: the market acknowledges their development and their chances for growth by rewarding them with high valuations.

According to bulls, the company will continue to rise in value due to its lower valuation and greater growth rate than most of its megacap peers.

With a price-to-earnings ratio of about 24 times forward earnings, Alphabet is more affordable than Amazon.com Inc. and Microsoft, but more expensive than Facebook parent Meta Platforms Inc. According to RBC Capital Markets analyst Brad Erickson, there can be debate over whether the stock's current multiple is already factoring in enough optimism. However, he remains optimistic about Alphabet and believes the stock is "packed for a cause."




Alphabet is the most popular stock on Wall Street, with nearly unanimous support. All but one of the 49 analysts tracked by Bloomberg who cover Alphabet recommend that investors purchase shares of the company. The average 12-month price estimate for the stock is $3,321, which implies an 11% increase in value over the firm's current price.




According to Erickson, who wrote a note on October 26 about the Google Cloud Platform, "given the especially attractive Covid rebound exposure, ever-increasing YouTube engagement and monetization, and GCP's march toward profitability, we see solid reasons to own the name." He was referring to the Google Cloud Platform.




Alphabet posted third-quarter sales on October 26 that were higher than experts' expectations, thanks to increased advertising spending. Evercore ISI analyst Mark Mahaney wrote in a note that Alphabet's results were "some of the most impressive" he had seen in recent years, despite the company facing significant headwinds.

Mandeep Singh, a Bloomberg Intelligence analyst, wrote in a message that Alphabet's self-driving car division, Waymo, was a potential catalyst for the company's total addressable market expansion in the medium to long term. "Its cloud segment appears to be hitting a sweet-spot amid recent enterprise wins, while Waymo could add another catalyst for expanding its total addressable market in the medium to long-term," Singh wrote.


After the stock's rise, according to Matt Peron, director of research at Janus Henderson Investors, short-term traders may want to take some profits off the table.


It may not be as powerful over the next three months since "anything could happen in the short run," he added in a phone interview. "Over the next three years, on the other hand, we truly enjoy it and will keep it," says the company.




Cloudy Positivity


A continuation of profits growth will be the primary driver of Alphabet's future share price rises, according to David Kalis, a partner at Future Fund LLC. According to him, the stock is the second-largest holding in the Future Fund Active ETF (Future Fund Active ETF).




In 2023, the company's profits per share are predicted to reach about $130, according to an average of analyst forecasts published by Bloomberg. This represents a nearly threefold increase from the $44 EPS posted in 2018. According to Kalis, Alphabet's cloud division is the sector of the company that is underrated by the marketplace.


Alphabet, Google's parent company, led by Sundar Pichai, has finally surpassed the coveted $2 trillion market capitalization level for the first time. The market capitalization of the technology behemoth momentarily crossed the $2 trillion threshold late on Monday, ending at $2,987.03 per share.


Since January 2020, Alphabet's market capitalization has more than doubled from $1 trillion. Alphabet has now joined the ranks of Apple and Microsoft, which are already members of the $2 trillion club in the United States.


Alphabet, the parent company of Google, reported an all-time high revenue of $61.9 billion for the July-September quarter, as well as a record profit of $18.9 billion, for the third quarter.


It stated late last month that it anticipated almost no impact on reported revenues from foreign exchange in the fourth quarter, compared to a 1.5 percent tailwind in the third quarter and a 4 percent tailwind in the second quarter.



Apple achieved the $1 trillion milestone in April of last year, while Microsoft crossed the $2 trillion barrier in June of this year, respectively. Amazon is also on the verge of surpassing the $2 trillion mark.


Microsoft has surpassed Apple in terms of market capitalization, making the Satya Nadella-led cloud computing behemoth the most valuable firm on the planet. Both corporations have a combined market capitalization of over $2.5 trillion.


Tesla, Elon Musk's electric vehicle company, just breached the $1 trillion milestone and has now soared to a market capitalization of over $1.25 trillion, according to Bloomberg.


These five corporations are now worth about $10 trillion when taken as a whole. That's roughly a fourth of the total $41.8 trillion market capitalization of the entire S&P 500 index of large companies.

In a brief moment on Monday, Alphabet (GOOG, GOOGL), the parent company of Google, momentarily reached a market capitalization of $2 trillion, less than two years after reaching the $1 trillion barrier in January 2020. Following the company's achievement of the $2 trillion mark, its stock price fell back below $2 trillion.


Alphabet joins the ranks of IT behemoths Apple (AAPL) and Microsoft (MSFT), who are the only other publicly traded businesses in the United States to reach the milestone. Alphabet's expansion has been fueled by its control of the internet advertising business, which has long been dominated by a de facto duopoly between Google and Facebook, as well as its acquisition of YouTube.


A research published by eMarketer in May 2021 stated that in 2020, Google received 27.5 percent of total global ad revenue, while Facebook collected 22.3 percent of total global ad revenue. Alibaba (BABA) and Amazon (AMZN), two of the world's largest e-commerce companies, are catching up, with the former accounting for 8.6 percent of worldwide net ad income and the latter accounting for 5.2 percent.


The fact that Alphabet has become such a dominant force in online advertising is due in part to the widespread use of its search capabilities on the internet. After all, "Googling" has long since established itself as the de facto standard for conducting an online search.




In Mountain View, California, on Wednesday, May 17, Google CEO Sundar Pichai delivers the keynote talk at the Google I/O conference, which is being held. A new look at the digital services and gadgets that Google has assembled in its high-tech battle to become an even more dominant force in people's lives was revealed in a new video released by the company. (Photo courtesy of Associated Press photographer Eric Risberg)

In Mountain View, California, on Wednesday, May 17, Google CEO Sundar Pichai delivers the keynote talk at the Google I/O conference, which is being held. As part of its ongoing effort to become an even more important force in people's lives, Google has released the latest look at the digital services and gadgets that it has assembled in the high-tech battle to become even more influential. (Photo courtesy of Associated Press photographer Eric Risberg)

More

In a brief moment on Monday, Alphabet (GOOG, GOOGL), the parent company of Google, momentarily reached a market capitalization of $2 trillion, less than two years after reaching the $1 trillion barrier in January 2020. Following the company's achievement of the $2 trillion mark, its stock price fell back below $2 trillion.


Alphabet joins the ranks of IT behemoths Apple (AAPL) and Microsoft (MSFT), who are the only other publicly traded businesses in the United States to reach the milestone. Alphabet's expansion has been fueled by its control of the internet advertising business, which has long been dominated by a de facto duopoly between Google and Facebook, as well as its acquisition of YouTube.


A research published by eMarketer in May 2021 stated that in 2020, Google received 27.5 percent of total global ad revenue, while Facebook collected 22.3 percent of total global ad revenue. Alibaba (BABA) and Amazon (AMZN), two of the world's largest e-commerce companies, are catching up, with the former accounting for 8.6 percent of worldwide net ad income and the latter accounting for 5.2 percent.


The fact that Alphabet has become such a dominant force in online advertising is due in part to the widespread use of its search capabilities on the internet. After all, "Googling" has long since established itself as the de facto standard for conducting an online search.



Alphabet has risen to such heights in part because to its search engine, but also due to other factors. When Apple purchased the Android operating system for a meagre $50 million in 2005, it proved to be a foreboding move ahead of the launch of the company's first iPhone in 2007.


Android's rise to prominence as the world's most popular mobile operating system was made possible by the software's availability as an open source operating system.


This enabled the company to funnel ever more user data into its advertising business, so increasing the efficiency of its advertising campaigns even further.


YouTube was purchased by Google for $1.65 billion, a year after the company purchased Android. YouTube, the world's largest video-sharing website, has been a benefit for Alphabet, letting the company to expand its advertising prospects outside its Android and mail operations.


YouTube, on the other hand, has been the source of some controversy. The site has been roundly criticised for allowing outlandish conspiracy theories and falsehoods to spread over its network.


In addition to Amazon, Alphabet has entered the public cloud field with its Google Cloud Platform (GCP). According to research firm Gartner, Google Cloud Platform (GCP), a competitor to Amazon's Amazon Web Services (AWS) and Microsoft's Azure cloud services, will hold only 6.1 percent of worldwide market share in 2020, compared to Amazon's 40.8 percent and Microsoft's 19.7 percent. However, Google's market share has increased from 5.2 percent in 2019, while Amazon's portion has decreased from 44.6 percent.


The company has recently found itself in the crosshairs of federal and state authorities, as a result of which it is facing a whopping four antitrust cases in the United States. Additionally, the European Union's antitrust authority, the European Commission, has taken aim at Alphabet, fining the corporation billions of dollars for antitrust offences that occurred in the past.


The stock price of Alphabet has continued to increase in the face of these challenges, making it one of the most valuable corporations on the planet in terms of market capitalization.