Alphabet Inc (NASDAQ: GOOGL) Stock Overview – All You Need To Know About Alphabet Inc

Alphabet Inc. (GOOGL), originally Google Inc., is a multinational technology conglomerate specializing in Internet-related services and products headquartered in Mountain View, California, United States ^[1]. 

It was founded in 1998 by Larry Page and Sergey Brin, then students at Stanford University. The PageRank algorithm, which later became the underlying technology behind Google, was a project they worked on in 1995 as part of their Ph.D. studies. 

Once established as a registered company, Larry Page became Google’s first CEO. He ran it from 1998 to 2001, subsequently handing over the reins to Eric Schmidt for 10 years until 2011. After that, Larry Page resumed as CEO until 2015, when Alphabet became Google’s parent company ^[2]. 

At the time of this writing, Sundar Pichai is the CEO of Alphabet and Google, having taken over from Larry Page in 2015 ^[3]. 

Google’s Products 

Google is Alphabet’s largest and the flagship subsidiary. In 2022, Google generated over $282 billion in revenue, with over $162 billion coming from Google Search related services which accounts for a significant portion of Alphabet’s annual revenue ^[4]. 

Google has three main sectors of operation, namely Google Services, Google Cloud, and Google Workspace. 

Let’s explore the services under each sector: 

Google Services 

They include Android, Chrome, Gmail, Google Search, Google Photos, Google Play, Google Drive, and YouTube. 

Google Cloud  

This sector offers enterprise-level cloud services for businesses. Google Cloud allows developers to build, test, and deploy applications on its infrastructure. 

Google Workspace 

Google Workplace is a suite of tools for business and personal productivity including Gmail, Google Meet, Google Drive, Google Docs, and Calendar. 

Other notable branches of the Alphabet include Search, YouTube, Android, and Chrome.

Employees 

Data from Statista shows that Alphabet currently has a workforce of about 190,000 people worldwide ^[5]. As the company expands its operations to other sectors, it continues to grow its employee count.  

Known for its employee benefits and perks, Alphabet attracts some of the most skilled talents in the world. For instance, Alphabet has policies that promote workplace safety, all employees get paid parental leave, access to the gym within the workplace, and remote working options^[6]. 

Google has also won the award of Best Engineering Team and Best Company Outlook multiple times, making it an attractive employer for the world’s best tech business and research talent ^[7]. 

Key Milestones

Also, over the years, Alphabet grew its portfolio by getting into partnerships and acquiring companies that share its business visions.  

Here are some famous subsidiaries under Alphabet:  

• Alphabet acquired DeepMind in January 2016, a UK-based AI company, for more than $500 million ^[8]. 
• In December 2017, Alphabet announced its acquisition of Xively, an IoT platform provider, for $50 million ^[9]. 
• In March 2018, Google announced the acquisition of the GIF platform Tenor, which provides a platform for searching for and sharing animated GIFs ^[10]. 
• In June 2019, Alphabet announced the acquisition of Looker, another intelligence software and big data analytics platform for businesses ^[11]. 

Alphabet is a major player in the technology industry, with various subsidiaries supporting its growth. 

Stock History 

Google Inc. first went public on 19 August 2004, with Morgan Stanley and Credit Suisse as its underwriters. Its 2004 IPO raised $1.9 billion from its 22,500,000 shares, trading at $85 per share ^[12].   

Google Inc’s IPO was a massive success, as it was the leading and dominant search engine in the industry, with over 80% market share. Besides making its two founders instant billionaires, thousands of Google employees who took stock options as compensation also got an upside from the company’s growth in valuation. Larry Page and Sergey Brin got $4 billion each for holding a stake with a similar value in Google ^[13].  

Today, Alphabet Inc. is one of a handful of the most valuable companies in the world by market capitalisation, worth a reported value of $1.34 trillion ^[14]. 

Alphabet Inc.’s Share Price 2024 ^[15][16][17]

Here’s a look at how Alphabet Inc. has been performing over the past year: 

Alphabet’s stock has been on a steady uptrend since March 2024, likely driven by the strong performance reported in Q1, which revealed a 15% year-over-year increase in quarterly revenue to $80.5 billion. The company also introduced its first-ever quarterly dividend and announced a substantial stock buyback program. 

At the time of writing, GOOGL is trading at $170.43, which is approximately 12% below its 52-week high of $191.75. 

The recent drop in Alphabet’s stock was driven by its second-quarter results that exceeded earnings estimates but underperformed in other areas such as YouTube ad revenue, resulting in a 5% decrease in stock value during the next day’s afternoon trading. 

Additionally, news surfaced that Alphabet’s negotiations with Israeli cybersecurity firm Wiz for a potential $23 billion acquisition had fallen through. This deal would have been the largest in Google’s history, and its collapse likely contributed to investor disappointment and the subsequent stock price decline. 

Stock Splits

Google Inc. has had several stock splits since its inception as a public company: 

Class A and Class C 

Its first split created two classifications of publicly traded stocks. These are: 

• Class A: GOOGL shares listed and traded in public markets and stock exchanges. These shares come with regular voting rights. 
• Class C: GOOG shares listed and traded in public markets and stock exchanges, but without voting rights. 

Class A shares were available until April 2014, when the stock split happened, enabling the creation of Class C shares. The founders, Larry Page and Sergey Brin maintained Class B shares, which granted them 10 times more voting power than Class A. Class B shares aren’t listed on any public market.  

The April 2014 stock split granted you 1998 new Class C shares for every 1000 Class A shares owned ^[18].  

Class C 

Another stock split that only affected Class C shares occurred on 27 April 2015. It wasn’t a traditional stock split. Instead, it compensated investors 2.7455 shares per 1000 Class A shares owned, attempting to get Class C shares traded at a discount due to the lack of voting rights. 

20-for-1 stock split 

On 15 July 2022, Alphabet underwent a 20-for-1 stock split, giving each shareholder 19 additional shares of each share of the same class owned. That allowed the price of one share of Alphabet stock to open at a split-adjusted price of $112.64, a significant reduction from its pre-split price of $2255.34 per share ^[19]. 

Dividends

To date, Alphabet has not paid any dividends to its investors. Instead, Alphabet reinvests its profits into research, development, and expansion.  

Stock Trading Information  

Here is the key information for trading Alphabet (GOOGL) stock on NASDAQ ^[20]: 

• Stock Symbol: GOOGL 
• Location: United States 
• Primary Exchange: NASDAQ 
• Market Capitalisation: $1.34 trillion as of 3 May 2023 
• Trading Hours: Investors can trade in the Pre-Market (4:00-9:30 a.m. ET), and After-Hours Market (4:00-8:00 p.m. ET). 
• Stock Price: The Alphabet Inc. Class A stock price is $105.32 as of 3 May 2023 
• Volume: The average daily trading volume for Alphabet Inc. is around 41 million shares. 
• Leverage: varies depending on broker 
• Dividends: Alphabet Inc. does not currently pay dividends. 
• Trading Fees: vary depending on the broker. 
• P/E Ratio: The P/E ratio for Alphabet Inc. is 23.01 

Why People Like Alphabet (GOOGL) 

“Let me Google that.” 

Besides being the leading search engine, here are some other reasons why Alphabet is one of the most valuable companies in the world: 

• The global presence and diverse revenue streams 

Alphabet’s subsidiaries, including Google, YouTube, and Waymo, have a global presence, which ensures a diversified revenue stream. 

• Strong financial performance 

Alphabet’s revenues and earnings have a strong annual track record despite disruptions like the COVID-19 pandemic and stock market trends. Alphabet has survived multiple stock market downturns.  

• High EV adoption 

Alphabet’s subsidiary, Waymo, is at the forefront of the autonomous vehicle industry. Formerly the Google self-driving car project, Waymo stands for a new way forward in mobility, offering autonomous driving technology and services. As the global demand for electric and self-driving vehicles increases, there is a great potential in how Waymo could develop.  

• Technological innovation 

Alphabet is at the top of the list of tech companies that invest its resources and capital heavily in research and development. Since its inception, Alphabet has been the industrial benchmark of cutting-edge Internet products and services worldwide. This innovative culture has driven the company’s growth and ensured its position as a tech industry leader. 

What Affects the Price of Alphabet Stocks?  

Stock prices can often be affected by market events and news surrounding the company. Here are some factors that could affect the price of Alphabet stocks.  

• Revenue and earnings  
  Alphabet’s quarterly earnings reports are a crucial basis that affects its stock prices. Most investors rely on the company’s revenue growth and earnings performance to value the company.  

• Change of management or employees
  Changes in leadership and key employees can have an impact on Alphabet’s operations and future growth prospects, potentially leading to changes in stock prices. 

• Product updates or launches 
  Alphabet is known for constantly innovating and launching new products and services. New product releases or updates can drive the stock price higher if investors perceive them as significant growth driver for the company. 

• Economic and political factors 
  Economic or political changes can significantly impact the company’s revenue, earnings, and future growth prospects. For example, changes in trade policies, interest rates, or tax laws can impact Alphabet’s operations. 

• Company partnerships
  Alphabet has partnerships with various companies, including software developers, advertisers, and manufacturers. These partnerships can affect the company’s prospects and stock prices. 

• Market trends 
  As a technology company, Alphabet operates in a highly dynamic and competitive market. For instance, an instant growth in demand for cloud services, or artificial intelligence, can impact Alphabet’s stock prices. 

Latest developments investors should note 

Alphabet Q2 Earnings Report ^[21] 

Alphabet’s second-quarter earnings report revealed mixed results. The company posted earnings of $1.89 per share and revenue of $84.74 billion, both exceeding expectations. However, YouTube advertising revenue fell short at $8.66 billion, while Google Cloud revenue surpassed expectations at $10.35 billion with over $1 billion in operating profit for the first time. 

Overall revenue grew 14% year-over-year, driven by search and cloud services, though ad revenue growth slowed due to inflation and tighter marketing budgets. Despite missing estimates, YouTube’s ad revenue increased from the previous year, showing resilience against competition from platforms like TikTok. Net income rose to $23.6 billion, up from $18.4 billion the previous year. 

Alphabet’s earnings report suggests a strong financial position with promising growth prospects in cloud services and innovation, despite some challenges in the advertising market. Investors can view these developments as indicators of the company’s resilience and potential for long-term value creation. 

Emerging Competition from OpenAI ^[22] 

Alphabet faces a potential new threat from OpenAI’s announcement of “SearchGPT,” an AI-powered search tool. This prototype aims to deliver fast, concise, and accurate answers with clear sources, offering a more streamlined search experience compared to Google’s traditional search.  

While still in the testing phase, SearchGPT could challenge Google’s dominance, especially as it integrates real-time web information and enhanced conversational capabilities. The competitive landscape in search technology is heating up, with Microsoft also backing OpenAI and investing heavily in AI-powered search solutions. 

Investors should monitor these developments closely, as market sensitivity to increased competition could lead to market volatility. 

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