The market capitalization indicator of Alphabet Inc. on Friday, April 26, significantly exceeded the historical mark of $2 trillion.
The mentioned dynamic, which is a significant achievement for Google’s parent company, is the result of the firm’s earnings report, released last Thursday, April 25, becoming a strong argument to convince investors that Alphabet has gotten a position as a major player in the artificial intelligence industry.
Shares of the company rose in price by 9.7%. One security of the firm is worth $171.14. Against this background, Alphabet was valued at $2.14 trillion. The company’s market capitalization has grown by almost $187 billion. This increase in the figure has become one of the largest one-day rises in the history of the stock market.
Since the beginning of the current year, Alphabet shares have increased in price by 23%. At the same time, the Nasdaq 100 index grew by 5.5% over the same period.
Alphabet’s revenue for the first quarter of 2024 was $80.54 billion. This indicator showed an increase of 15% compared to the result for the same period last year. It is worth noting that LSEG analysts predicted that the company’s revenue for the first three months of 2024 would amount to $78.59 billion.
Alphabet’s financial results for January-March of the current year exceeded preliminary expectations for the dynamic of the corresponding indicator, largely due to the cloud computing unit. The high level of demand for cloud technologies is a kind of consequence of the so-called artificial intelligence boom.
Alphabet also pleased investors with the decision to introduce dividends and the announcement of a $70 billion buyback program. Currently, the company is demonstrating an example of a high-quality approach to management. Wayne Kaufman, the chief market analyst at Phoenix Financial Services, says that Alphabet has huge free cash flow and a significant research and development budget. At the same time, it is worth noting that the material and resource base in the context of activities in the artificial intelligence industry is critically important, but it is not a guarantee of unambiguous success.
It is worth noting that Alphabet earlier has already reached the $2 trillion figure, but the previous experience was short-term and did not belong to the category of what can be called a stable position. In 2021, the company’s shares showed growth, which made it possible to get to the mentioned figure, but it was a one-day event. In early April, Alphabet once again reached a market valuation of $2 trillion, but this achievement was quickly canceled as a result of the subsequent dynamic of the share price. Friday’s figure of $2.14 trillion differs from previous results with a higher level of sustainability. With a high degree of probability, this figure will be long-term. In addition, the $2 trillion mark was significantly exceeded on Friday.
The increase in market capitalization creates something like a space of opportunity for Alphabet. The $2 trillion threshold has also been crossed by Apple Inc., Microsoft Corp., Saudi Aramco, and Nvidia Corp. It is also gradually approaching this mark Amazon.com Inc.
As we have reported earlier, Alphabet’s Cash Boom Stimulates Dividend Hopes on Wall Street.
