Alphabet Inc GOOGL rallied on November 8 to surpass the $2 trillion in market value for the first time, rubbing shoulders with Apple Inc and Microsoft Corp, Bloomberg reports.
What Led To Growth? A rebound in spending on digital ads and growth in its cloud business fueled the rally. The Class A shares gained as much as 1.2 percent to a record high, with the stock extending a recent rally to a fifth session.
Alphabet is the top performer among the five most significant U.S. tech stocks this year. The growth in Google’s advertising business triggered over 70 percent of the advancement.
The bulls see further upside due to its cheaper valuation and higher growth rate versus its mega-cap peers. Alphabet trades around 24 times its forward earnings, making it cheaper than Amazon.com Inc (NASDAQ: AMZN) and Microsoft, but more expensive than Facebook parent Meta Platforms Inc (NASDAQ: FB).
“Given the especially attractive Covid rebound exposure, ever-rising YouTube engagement and monetization, and GCP’s march toward profitability, we see solid reasons to own the name,” RBC Capital Markets analyst Brad Erickson said, referring to the Google Cloud Platform following Q3 results.
Of the 49 analysts tracked by Bloomberg who cover the stock, all but one recommend buying Alphabet shares. The average 12-month price target for the stock is $3,321, which suggests an 11 percent upside from its current share price.
Alphabet’s Q3 sales beat consensus, reflecting robust advertiser spending. In 2020, Google generated $147 billion in ad revenue despite the pandemic shrinking of the advertising market.
Price Action: GOOG shares traded higher by 0.39 percent at $2,996.43 on the last check Monday.
