Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) is a multinational tech conglomerate based in Mountain View, CA. It offers online ad services via its Google Network services, which include Google Ad Manager, AdSense, and AdMob. The company has invested in data, machine learning, AI, analytics, and infrastructure.
Alphabet Stock Skyrockets to New 52-Week High
During trading on December 20, 2023, GOOG stock reached a new 52-week high of $143.08. YTD’s stock has risen 57.80%, with a market cap of $1.762 trillion. The stock soared after Alphabet revealed plans to restructure its ad business, which brings in around 80% of the company’s revenue.
The restructuring comes amidst Alphabet’s pivot to AI for ad generation and placement on its platforms, including YouTube and Google. In its last earnings report, Alphabet reported $76.69 billion in revenue, with $59.7 billion coming from ad sales.
Generative AI could lower costs significantly for both sellers and creators. In May, WPP, the world’s biggest ad firm, signed an agreement with Nvidia, the leader in AI chip technology, to develop an AI-powered content development engine. At the time, WPP CEO Mark Read said they could cut costs 10 to 20 times with AI.
Alphabet stock has been rising recently amidst improving macroeconomic sentiment. Additionally, optimistic comments from analysts amidst the company’s pivot to machine learning and AI have helped the stock.
Why Alphabet Uses Two Ticker Symbols
Investors seeking to add Alphabet stock to their portfolio will undoubtedly notice that the company uses a pair of ticker symbols on NASDAQ. The two ticker symbols represent different classes of Alphabet stock. Its Class C share uses the GOOG ticker, while the Class A share uses the GOOGL stock ticker.
Class A shares are voting shares, which carry one vote per share. Its Class C shares have no voting power. Additionally, the company has another class of shares called Class B. These shares are not publicly listed, and they carry super-voting power.
The share structure was designed to protect co-founders Sergey Brin’s and Larry Page’s ownership stakes. Together, they hold 86% of the Class B shares and 51.4% of Alphabet’s voting power.
From an investment standpoint, there is no difference in the classes of shares. The company issues EPS and other financial results using a formula that keeps the financial interests of the different classes equal.
Alphabet Stock Forecast
Wall Street analysts have given Alphabet stock a buy rating. They forecast a high of $180 and a low of $117 for the stock. Their average target for GOOG stock is $144.03, which is 1.73% for the stock.
Should You Buy GOOG Stock?
GOOG stock has a Forward P/E ratio of just 20.92, making it one of the best-valued stocks on Wall Street. Analysts predict that from 2022 to 2025, the stock will grow at a compound annual rate of 10%-18%. Coupled with its recent pivot to machine learning and AI, which will cut costs for its ad business, its EPS will continue to rise.
Additionally, as macroeconomic conditions, spending on online ads will rise, boosting revenue. Consequently, while GOOG stock recently peaked at a new 52-week high, there is still a lot of upside for the stock. Consequently, the buy rating by analysts is accurate.
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