Alphabet, born from a Google restructuring in 2015, is a tech titan. It’s the parent company of Google, the platform that has become so synonymous with search engines that people will use the term “Google it” more than they will “search it.”
Today, Alphabet encompasses a diverse portfolio of businesses, including its core search engine, advertising services, YouTube, Android, Google Cloud, Gemini (its new AI product), and innovative projects under its “Other Bets” segment. Alphabet’s vast ecosystem impacts various aspects of daily life, from online searches and digital advertising to smart devices and entertainment.
Alphabet has offices in over 50 countries. Its current CEO is Sundar Pichai. The company trades on the Nasdaq stock exchange under the ticker symbols GOOGL and GOOG and is included in the S&P 500 index and Nasdaq 100.
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Alphabet EPS and Revenue Breakdown 2020-2023
| Alphabet | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | $2.93 | $182.53 billion |
| 2021 | $5.61 | $257.64 billion |
| 2022 | $4.56 | $282.84 billion |
| 2023 | $5.80 | $307.39 billion |
Alphabet Share Price & Chart
The difference between GOOG and GOOGL? Alphabet has a dual-class structure, with GOOGL (class A) shares providing voting power. However, GOOG and GOOGL shares will likely perform the same over time. Regardless, after a dip in 2022, the Google share price has rocketed since the beginning of 2023, with artificial intelligence helping to propel the stock as it vies for market share in the rapidly growing sector.
P/E Ratio Average Over the Last Ten Years: 28.73 (Source: FullRatio)
With its Q1 2024 earnings, Alphabet initiated a cash dividend. Current Dividend yield: 0.45%
Technology Industry Comparison
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Google Share Price Forecast
Data compiled by TradingView shows that out of 64 analysts covering Alphabet (GOOGL), 50 have a Buy rating, and 14 have a Hold rating on the tech giant’s shares.
The Alphabet price target was raised to $210 from $176 at Tigress Financial in a recent note, with the firm keeping a Strong Buy rating on the stock. Tigress highlighted Alphabet’s ability to leverage generative AI functionality across its key product lines, as well as its ongoing innovation and growth in digital advertising. Tigress analysts believe market share gains in other key product lines will continue to push increasing shareholder value creation.
Following Google’s 2024 I/O event, analysts at Oppenheimer said it should assuage fears over the company’s position in AI. Oppenheimer said Alphabet showed its strong competitive position, driven by an essentially unlimited R&D budget, access to its significant user and data library, and 10 years of machine learning focus. The firm maintained an Outperform rating on Alphabet with a price target of $205.
Our View: Alphabet is a technology behemoth, and its move into AI and the introduction of dividends certainly makes it an attractive stock. There are, of course, potential headwinds, such as how artificial intelligence will impact search. However, for tech investors, it is definitely a stock to assess further.
Alphabet Stock Suitability
Alphabet, like many tech companies, offers a compelling mix of innovation and growth potential (and now dividend payments), but it’s not for everyone. Here’s a breakdown of investor profiles that might find Alphabet shares attractive:
As we have said before, with other tech stocks, investors comfortable with growth stock risks will be better suited to owning Alphabet shares. Investors with a mid-to slightly high-risk tolerance who are comfortable with potential volatility may be a good fit.
With artificial intelligence the latest technology helping to propel businesses forward, investors bullish on the future of AI, as well as other technologies such as self-driving cars, could gain exposure to these trends via Alphabet shares.
While Alphabet has established itself as a tech giant, its subsidiaries like Waymo and Verily are still in their early stages. Investors seeking a long-term play on the company’s continued growth and ability to capitalise on new opportunities might find Alphabet shares appealing.
Given that Alphabet has a diverse range of businesses, it can offer portfolio diversification for investors looking to spread their risk across different sectors.
