California-based tech giant and Google parent company Alphabet Inc. (GOOG) does not require much introduction. Commanding a massive market cap of $2.3 trillion, Alphabet is celebrated worldwide for its essential flagship products, such as Gmail, Google Maps, and Google Photos, which have become indispensable in our daily lives.
Companies valued at $200 billion or more are generally labeled as "mega-cap stocks,” and Alphabet not only fits this category but surpasses it by a wide margin, boasting a market cap well above this threshold. Founded in 1998, the company has emerged as a global tech powerhouse renowned for its innovation and market dominance. While Alphabet operates in various sectors, from search engines and advertising to cloud computing and artificial intelligence (AI), Google Search remains its primary revenue generator, dominating the global search engine market.
Despite the marginal pullback from its 52-week high of $185.93, hit on June 26, shares of this mega-cap stock have showcased resilience, surging nearly 22.2% over the past three months, outpacing the broader S&P 500 Communication Sector SPDR’s (XLC) 5.6% gain over the same time frame.
Over the longer term, GOOG is up 31.5% on a YTD basis, easily overshadowing the XLC’s 18.3% gains. Moreover, shares of GOOG have soared almost 55.7% over the past 52 weeks, compared to the XLC’s 35.5% returns during the same period.
Since June last year, the stock has remained consistently above its 200-day and 50-day moving averages, indicating a bullish price trend.
Alphabets’ outperformance stems from its unrivaled dominance in the search engine market, capturing over 90% of the global market share and driving substantial advertising revenue. As a major beneficiary of the AI boom, Alphabet has seamlessly integrated cutting-edge AI capabilities across its product suite, enhancing user experience and engagement.
Furthermore, on April 26, GOOG stock jumped a notable 10% after a rosier-than-expected Q1 earnings report, showcasing strong revenue growth and wider profit margins. Investors celebrated its debut dividend, a $70 billion stock buyback, and a bullish outlook on AI innovation supported by significant data center investments, driving the stock's impressive rise.
To emphasize the stock’s outperformance, its rival Apple Inc. (AAPL) has underperformed GOOG. Shares of AAPL have surged 10.8% on a YTD basis and 15.1% over the past year, underperforming GOOG during both these periods.
Considering GOOG’s strong price action, analysts are highly bullish on the stock. Among the 44 analysts covering the stock, there is a consensus rating of “Strong Buy,” and it is currently trading below the mean price target of $193.84.
On the date of publication, Anushka Mukherjee 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.
