Google stock (issued in part by parent company Alphabet), is one of Wall Street’s most successful stories. Google was founded in 2009 by two visionary doctoral student. The company quickly rose to the top of online search due to its unique advantages over its rivals. Search speed and relevance of search results are just two examples. Google’s stock price has increased since being listed on the stock market. This is a reflection of the company’s immense success.
A smart long-term investment is to purchase Google stock via the stock market. This article will show you how and why to invest in Google stock.
What is Alphabet’s Google stock worth?
Google was initially founded in 1998 in Silicon Valley by Larry Page, Serge Brin and others as a search engines company. Google has grown to be a global technology powerhouse. Google is a global technology powerhouse, just like the FAANG member companies (Facebook. Amazon. Apple. Netflix. Google). Google has diversified its products and services, as well as acquired other companies to expand and keep its base. Google is working to increase its user base while maintaining its growth momentum.
Google announced plans in 2015 to reorganize its parent company as Alphabet Corporation. It will be the parent company of several separate operations, including Google. They will then concentrate on the search engine businesses. Alphabet, which is also the parent company to several other businesses, is for now Google’s parent company. Google stock refers to Alphabet stock. However, the indices at (NASDAQ. GOOGL) & (NASDAQ. GOOG) remain unchanged.
Alphabet is the company with the highest market capitalization worldwide in 2020. It is also the most ideal business model. It can be an excellent investment opportunity to buy Google stock. But, it’s important to remain vigilant about short-term risks. Coronavirus and regulators are more concerned with the company’s power and how customer data are managed.
Alphabet and Google’s new business model
Google realized that their search engine was not sufficient to meet its future growth goals. Google developed products and services like Gmail, Chrome browser, Maps and Drive online document storage service. This was done to retain and increase traffic.
Step by step, the company offers Adwords and Adsense services to help you monetize your business model. Initially, the company was focused on keyword-targeted advertisements. Later, they developed advertising space for other websites. Google acquired YouTube in 2006 and grew its market share in online advertisement. This made it the world’s leader in this field.
Google no longer relies on advertising to make money. It continues to develop new technologies, such as Chromecast wireless streaming, Chromebooks for laptops and the Android operating system, which have all brought in great profits for customers. company.
Because of the constant updating of technology and advertising, the company has risen to prominence – making it an integral part of every day life. This is also a great way for other companies to advertise their products and services and optimize their ability to reach customers.
Google stock price technical analysis
Google stock analysis will be based on weekly data (Google stock price) to provide a longer history of quotes.
In August 2012, the goole stock price climbed after an upside breakout of the $650 support area. The stock market peaked at $1228 by February 2014. Google quickly decided to split the google stock price to reduce the stock’s price by halves. This would allow smaller investors to have more liquidity and ensure stability.
This didn’t slow down the rally. However, the stock price rebounded to a February 2020 record close to $1530.
Google shares prices dropped once again due to the Covid-19 crisis and overall stock market slump. This break with the positive trendline, which has supported stock prices since January 2015, caused by the Covid-19 crisis. The Google stock price reached its lowest point (around $1009) in March 2020. This is exactly the level of the retracement. Fibonacci 50% on upside between the Jan 2015 low, Feb 2020 high, and moving average support area in which google stock prices have bounced back multiple times in the past.
The bounce has now returned above the 23.6% Fibonacci level of retracement, which was the previous resistance zone at $1290. This breakout confirms the medium term upside potential. Google, however, has shown bullish prospects over the next months of 2020 (see below). The record breaking break will be at 1530 in February 2020.
Google stock price is trending up over the medium/long-term. Both the 50-week and 200 week moving averages (red) are moving up, with the price moving above. Positive signs include the weekly RSI, or Relative Strength Index, rising above the 50 moving mean. This is also a sign that the price line has moved higher.
Mid-term chart analysis for Google stock
Below is a chart showing the Google price history with an emphasis on daily movements for 2019 and 2020.
Google’s stock price was severely affected by the February 2020 stock market crash caused by Covid-19. Google’s stock price fell more than 30% over a month from the close on February 21, 2020, to the low of March 23rd 2020. This comes amid a global stock market decline, with the S&P 500 index losing nearly 35%.
Google stock price rallied strongly after the drop and gained more than 78%, while S&P 500 only recovered 61.8% by May 1.
Consider the resistance of 50-day moving average (inblue) and the 61.8% Fibonacci Retracement level towards $1280. A break of this resistance area pushed google stock prices up sharply the 29th. April, one-day after Q1 2020 results were revealed (see below).
Google’s uptrend is reinforced by this strong breakout and rally, which will likely push the price lower than it was previously.
Google Stock Q1 2020 earnings disappoints, but bullish outlook reassures shareholders
Alphabet (Google) released its Q1 2020 results. Investors were worried about the negative impact of the Corona virus and budget cuts on advertising campaigns. Book of company.
But they are still hopeful that the Corona pandemic’s economic effects will not be as devastating as Google thought. The stock price of Google stock soared by almost 10% in the hours following this prediction.
The company reported quarterly earnings in the range of $9.87 per sen and revenue of $41.16billion — slightly less than analysts’ estimates. Investors were still reassured by 13% year-overyear revenue growth.
Google stock really skyrocketed during the company’s conference call when CEO Sundar Pichai, and CFO Ruth Porat provided more information about the first quarter and first two weeks for the fourth quarter. two. They gave positive information in spite of the dire situation. Porat admits that the March ad revenue declined “strongly”, but believes it won’t get worse in April. Based on our estimates for the week ending March 31, we don’t see any sign of revenue dropping further year-over-year. She added that “there are some early indications at this point users are reverting towards more commercial behavior,” although there is uncertainty over stability or future profitability.
Google’s Direct Response Ad continues growing
YouTube’s direct feedback system (under Alphabet Group) continued its strong growth throughout the quarter. YouTube’s advertising revenue was $4.04 Billion, an increase of 33% over the previous year. The strong revenue growth of YouTube continued into March, when the coronavirus became a worldwide pandemic.
Porat shows the performance gap between direct response ads and branded ads. Direct response ads aim to encourage viewers to make a specific action (e.g. visit a site or make a purchase). Direct response advertising, however, saw significant year-over-year growth in the quarter.
“Social isolation” encourages online shopping
Pichai believes users’ increased dependence on Google Services due to travel restrictions has contributed towards changing their behavior.
There are 4x as many searches for Coronavirus than there are for the Super Bowl. Between February and March 2016, Android apps were downloaded by 30% more people than in March. YouTube’s viewing time also increased “dizzyingly”.
He also claimed that 100 million students and teachers are currently using Google Classroom, a figure which is twice the number at the beginning March.
Google search will recover rapidly
Pichai says search advertising is more lucrative than other forms because advertisers can quickly find the results they want. Adjust your advertising strategy quickly.
Alphabet’s cost control policies
Leaders at Alphabet come up with a way to reduce investment costs and staffing. In 2020, investment will be “slightly lower” as the company reduces its global office space and restricts acquisitions. This also temporarily delays construction work, Porat stated.
She indicated that the company had revised its headcount forecasts for the third quarter.
CNBC reported that Porat had confirmed that the company would reduce its marketing budget in an earlier report. “We have cut our marketing budget and spent more on advertising, promotions and marketing than we had planned at the beginning… and cancelled many major events throughout the year,” she stated.
The company continues buying margin shares
Porat also noted that Alphabet stock purchases will continue as planned. This will boost the share price and help to increase earnings per share.
“At the beginning of this year, we anticipated to buy back share at a pace that is at minimum consistent with the fourth quarterly on the power-of- attorney and we’re keeping the intent into the first quarter,” she stated.
Google Financial Analytics
Before you invest in Alphabet stock or google shares (Alphabet stock), make sure to review the company basics and examine Alphabet’s track record. Alphabet’s balance sheet reflects not only the company’s performance but also gives information about its future potential through the investments made to grow and diversify. Corporation model.
The next section will discuss:
Google Revenue Analysis
Alphabet’s Earnings (EPS) Analysis
Analyze Google’s profitability
Analysis of Google Cash Flow
Google Revenue Analysis
Alphabet’s revenue figures are a key indicator of its financial health. But, it is important to consider other data.
Google has seen a rapid rise in revenue over the past ten year, thanks to its successful adoption of internet advertising. It’s hard to judge if the company’s current business model works. Google’s potential remains very appealing to investors if the growth rate is maintained.
Google’s online advertising industry is challenging traditional advertising models such as Omnicom, Publicis and WPP.
Google’s EPS analysis
EPS is the profit of the company divided with the number of shares. This number gives investors an indication of the return Google shareholders get for each share.
Google’s EPS dropped slightly in 2017 due to the European Union’s fine for the company abusing its monopoly status to consolidate its position. Google’s overall EPS growth in the past ten year has been quite good.
Google Profitability: Marginal Analysis and Profitability for Google stock
Google is one the most lucrative businesses in the entire world. The company has experienced a steady operating profit margin and a business model that is profitable. However, there has been a downward trend over the past ten years.
Google’s business model seems to be in decline
Alphabet raising the costs of investing in fixed assets is a reason for a lower operating margin. The company plans to invest in potential future areas, such as artificial intelligence or cloud-based storage services.
Analysis of Google Alphabet Cashflow
Technology investors were particularly interested in cash flow after the explosion of the internet bubble, and subsequent bankruptcies.
Google’s operating cash flow has increased steadily over the past ten years. This indicates that the business generates lots of cash. It is a sign that shareholders do not need to worry about Google’s finances, despite EU fines.
The Group also provides a number of subscription-based services. This will provide Google with predictable and stable cash flow in the long-term.
How do I trade Google shares
Admirals lets you trade alphabetical stock prices via CFDs (Contracts of Difference). CFDs let traders ‘bet’ stock prices, and can be leveraged to take advantage of short-term fluctuations. Long-term investors have the option to directly invest in Google Shares via the Invest.MT5 trading accounts. The commission fee is 0.01 USD/share – the lowest in the market.
Google’s future outlook
Google’s financial strength and business security are unquestionable. A steady uptrend is also evident in the chart analysis.
Google’s advertising business is slowing but it has a lot of financial capital that allows it to invest more in new technologies and other areas. But, Google will need to compete with others in the same industry and there is no guarantee for future success.
Some technology companies, including Google, are also subject to greater scrutiny from government regulators. Alphabet stock prices will fall despite the popularity and success of Google search.
The unstable Corona pandemic situation is something short-term investors should consider.
Google stock is a great stock market investment.
