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Alphabet (GOOGL) Stock Attracts Bullish Coverage on Valuation
By: Schaeffer's Investment Research | October 1, 2024
• Options are affordably priced as well
• Call traders are chiming in as well
Pivotal initiated coverage of Alphabet Inc (NASDAQ:GOOGL) with a "buy" rating, noting the Google parent's “attractive valuation in any realistic scenario.” GOOGL was last seen trading near breakeven at $165.97.
The shares pulled back after hitting a July 10, record high of $191.75 to their lowest level since March, but have since bounced to conquer their 40-day moving average. While the $168 region has been acting as a ceiling since late August, GOOGL sports a 20.3% year-to-date lead.
Calls have been much more popular than usual. This is per GOOGL's 10-day call/put volume ratio of 3.10 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 93% of readings from the past year.
Drilling down to today's options activity, 62,000 calls and 24,000 puts have already traded hands, which is triple the volume typically seen at this point. The most popular contract by far is the weekly 10/4 170-strike call, with new positions currently being opened there.
Options are attractively priced. This is per Alphabet stock's Schaeffer's Volatility Index (SVI) of 24% that ranks in the relatively low 20th percentile of its annual range, meaning options traders are pricing in low volatility expectations at the moment.
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Alphabet $GOOG seeing some beautiful continuation higher this morning in pre-market
By: TrendSpider | October 1, 2024
• Alphabet seeing some beautiful continuation higher this morning in pre-market.
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$GOOG Previous supply zone acting as new demand... Not a bearish occurrence
By: TrendSpider | September 29, 2024
• Previous supply zone acting as new demand...
Not a bearish occurrence. $GOOG
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At 23x trailing earnings, Alphabet is the cheapest of the Mag Seven stocks by a decent margin. $GOOG
By: TrendSpider | September 27, 2024
• At 23x trailing earnings, Alphabet is the cheapest of the Mag Seven stocks by a decent margin. $GOOG
$META - 29x
$AAPL - 35x
$MSFT - 36x
$AMZN - 45x
$NVDA - 55x
$TSLA - 111x
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$GOOG Just a S/R flip at the multi-year breakout zone until proven otherwise
By: TrendSpider | September 1, 2024
• $GOOG Just a S/R flip at the multi-year breakout zone until proven otherwise.
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$GOOG Potential bear flag setup with Relative Performance indicator making lower lows...
By: TrendSpider | August 29, 2024
• Potential bear flag setup with Relative Performance indicator making lower lows...
Do-not-touch list on the long side $GOOG
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Alphabet (GOOGL) Turns Twenty
By: Bespoke Investment Group | August 19, 2024
Twenty years ago to the day, the company running the world's largest search engine went public. On August 19th, 2004, Alphabet (GOOGL) shares IPO'd at a split-adjusted price of $2.13. In the 20 years since, the stock has been a top performer in many aspects. Simply looking at the top line, revenues have exploded from $512 million in Q4 2003 to $84.7 billion in the latest quarter. Given its rise to become one of the six "trillion dollar market cap" companies, the stock has ripped higher an astounding 7,669% from its IPO price.
So how has Alphabet done in the 20 years since it went public versus other big winners in the stock market? Below is a look at the 30 stocks currently in the S&P 500 that are up the most over the last 20 years. As shown, these 30 names are all up more than 3,000% since GOOGL's IPO, and GOOGL ranks as the 11th best. Unsurprisingly, the single best stock by a huge margin is NVIDIA (NVDA) with a gaudy 127,418% gain, but other mega-caps like Apple (AAPL) and Amazon (AMZN) have both put up better numbers than GOOGL as well. Additional names that have done better than GOOGL include Netflix (NFLX) with a 30,000%+ gain, Monster Beverage (MNST), Booking Holdings (BKNG), Intuitive Surgical (ISRG), Regeneron (REGN), Deckers Outdoor (DECK), and Salesforce (CRM).
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Alphabet share price Double Top Breakout today on 19-Aug-2024. GLTM & GLTA
$GOOG Hold the line!
By: TrendSpider | August 17, 2024
• Hold the line! $GOOG.
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Antitrust Scrutiny Pulls Put Traders to Alphabet Stock
By: Schaeffer's Investment Research | August 14, 2024
• The Department of Justice (DOJ) is considering breaking up Alphabet
• A court ruled the company monopolized the online search market
The Department of Justice (DOJ) is considering breaking up Big Tech titan Alphabet Inc (NASDAQ:GOOGL), after a court ruling determined the company monopolized the online search market, per a Bloomberg News report. This comes amid Alphabet's Pixel phone launch, which showcased its Gemini technology and positioned it as a leader in bringing artificial intelligence (AI) to smartphones.
GOOGL was last seen down 1.2% to trade at $162.20, after a rally off the 180-day moving average fell short of the $165 level. The stock has pulled back significantly from its July 10, all-time high of $191.75, but despite its 10.4% quarter-to-date deficit, it still sports a 16.8% lead for 2024.
Over at International Securities Exchange (ISE), Cboe Volatility Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GOOGL's 50-day put/call volume ratio sits higher than 97% of readings from the past year. This indicates traders have been more bearish than usual.
Drilling down to today's options activity, 54,000 puts have already crossed the tape, which is double the intraday average volume. The most popular contract is the August 160 put.
It's also worth noting the Alphabet stock sports affordably priced premiums. This is per the equity's Schaeffer's Volatility Index (SVI) of 25% that ranks higher than just 21% of annual readings.
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Cathie Wood & Ark Invest's Buys 14,686 Shares of Alphabet Inc. (GOOG)
By: Ark Invest Daily | August 12, 2024
• Cathie Wood and Ark Invest's trade activity from today 8/12.
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$GOOGL Leaps Sweeper
By: Theta Warrior | August 13, 2024
• $GOOGL LEAPS SWEEPER.
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$GOOG Are you comfortable paying 23 times earnings for Alphabet stock?
By: TrendSpider | August 7, 2024
• $GOOG Are you comfortable paying 23 times earnings for Alphabet stock?
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Monday would be a 3-day reaction plunge. There remains the risk of a bounce and then a more serious pattern forming in September.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174862479
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$GOOG This oversold bounce might have legs
By: TrendSpider | July 31, 2024
• $GOOG This oversold bounce might have legs.
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When You Look Back in 5 Years, You'll Wish You'd Bought This $2 Trillion Artificial Intelligence (AI) Stock
By: The Motley Fool | July 31, 2024
• When You Look Back in 5 Years, You'll Wish You'd Bought This $2 Trillion Artificial Intelligence (AI) Stock
Alphabet is one of the cheapest megacap technology stocks, despite being a leader in AI.
Alphabet (GOOG 0.75%) (GOOGL 0.73%) is the technology conglomerate behind Google, YouTube, autonomous driving company Waymo, and artificial intelligence (AI) developer DeepMind (to name just a few of its subsidiaries).
Google remains the dominant internet search engine globally, and it used that success to build other businesses like Google Cloud and Google Workspace (which includes Gmail and Google Docs). But as the window to the internet for over 20 years, Google Search is also a repository of some of the most valuable data in cyberspace, which gives Alphabet an incredible edge in the AI race.
Alphabet is already generating billions of dollars in revenue from AI specifically, and the best is probably yet to come. Its stock is very cheap based on one widely used valuation metric, and when investors look back on this moment in five years, they might wish they had bought it today.
Alphabet is weaving AI throughout its entire business
Google has a 91% global market share in the internet search industry, but it came under threat last year following the rapid adoption of OpenAI's ChatGPT. AI-powered chatbots can provide direct answers to almost any question, creating a more convenient experience compared to Google Search, which requires the user to sift through webpages to find the information they need.
It prompted Alphabet to launch its own family of AI models called Gemini, which power a new Google Search feature called AI Overviews. Overviews speed up the search experience by delivering text-based responses at the top of Google's traditional web results. They include reference links so the user can view the source of the information, and Alphabet says they are receiving more clicks than the links that appear in traditional search results. That could have positive implications for advertising revenue when AI Overviews roll out more broadly.
Gemini is also available in Google Workspace for an additional monthly subscription fee. It integrates into productivity applications like Google Docs, Sheets, Slides, and Gmail, allowing users to rapidly create content and speed up their workflows. One Workspace customer, Click Therapeutics, is using Gemini to analyze patient feedback to build digital treatment plans, and the use cases will likely expand further over time.
Google Cloud is another critical component of Alphabet's AI strategy. Like most top cloud providers, Google Cloud offers AI data center infrastructure fitted with chips from leading suppliers like Nvidia. However, Alphabet also designed its own chips in-house, and its new Trillium tensor processing unit (TPU) delivers 5 times more compute performance than the previous version.
Developers use that computing power to perform AI training and inferencing to deliver the most advanced AI models, so faster chips can translate into cost savings and higher-quality outcomes. Google Cloud also offers a library of ready-made large language models (LLMs), including Gemini, which developers can use to accelerate the creation of their applications.
Google Cloud just crossed a noteworthy milestone
Alphabet generated a record $84.7 billion in revenue during the second quarter of 2024 (ended June 30), a 14% increase from the year-ago period. Google Search remained the dominant part of the conglomerate, accounting for more than half of that revenue.
Google Cloud was the standout performer, though, because its sales grew by 29% to $10.3 billion. It was the first time the segment crossed the $10 billion mark, and AI played a key role in achieving that milestone. Alphabet said its AI infrastructure and solutions have already generated billions of dollars in revenue to date, with over 2 million developers currently using them.
Both of those numbers are likely to rise in the future as more businesses integrate the technology into their day-to-day operations.
Alphabet continues to carefully manage its costs to drive profitability. Its total operating expenses ticked up 8.6% during Q2, and since that was much slower than the pace of its revenue growth, more money flowed to the bottom line. As a result, the company's earnings per share soared 31% year over year to $1.89.
Capital expenditures are one thing investors are watching closely, because building AI infrastructure is incredibly expensive. Alphabet spent $13 billion on capital expenditures during Q2, and it expects to spend at least $12 billion per quarter for the rest of 2024. The company warned this could temporarily pressure its profit margins, but the long-term payoff from having more AI capacity could outweigh any short-term negatives.
Alphabet stock is cheap
Alphabet generated $6.97 in earnings per share over the last four quarters, and based on its stock price of $167.28 as of this writing, it trades at a price-to-earnings (P/E) ratio of 24. That is a 24.7% discount to the Nasdaq-100 index, which has a P/E ratio of 31.9, implying Alphabet is heavily undervalued compared to its big-tech peers.
Alphabet's P/E ratio is also the cheapest among every other company with a valuation of at least $2 trillion:
PE RATIO DATA BY YCHARTS
Nvidia, Microsoft, and Apple trade at an average P/E ratio of 45.2. That number is heavily skewed by Nvidia, so I'm not suggesting Alphabet stock will climb that high. However, it might be appropriate for the stock to rise 45% to trade in line with the average P/E ratio of Microsoft and Apple, which is 35.
After all, Alphabet's earnings growth of 31% during Q2 was substantially faster than what both Microsoft (8.9%) and Apple (13.5%) are forecast to deliver in their upcoming quarters. Plus, Alphabet might have an edge over both companies in the AI space, because they rely heavily on third-party developers like OpenAI for their AI software.
Simply put, besides the fact Alphabet is generating strong growth already with promising long-term potential thanks to AI, there is a clear case its stock should be trading much higher based on the valuations of some of its peers in the tech industry.
Therefore, when investors look back on this moment a few years from now, they might be glad they scooped up Alphabet shares at the current price.
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Alphabet $GOOG Anchors Away
By: TrendSpider | July 27, 2024
• $GOOG Anchors Away.
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$GOOG ITM SIZE Put Writer
By: Theta Warrior | July 24, 2024
• $GOOG ITM SIZE PUT WRITER.
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Google Just Reported Earnings:
By: Evan | July 23, 2024
• GOOGLE $GOOGL JUST REPORTED EARNINGS
EPS of $1.89 beating expectations of $1.85
Revenue Ex-TAC of $84.7B beating expectations of $84.3B
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Added another Sept 195 call today, record highs are 100 minutes away! And GOOG will see over 200 this week imo
Alphabet Results to Set Tone for Big Tech on Advertising, Cloud
By: Bloomberg News | July 23, 2024
All eyes are on Alphabet Inc.’s earnings report to set the tone for how megacap technology companies fared in the second quarter.
Alphabet, which has gained more than 16% since its blowout first-quarter report, needs to show that spending on AI is continuing to drive revenue in its cloud and advertising businesses. The results also come on the heels of a broader tech selloff, with the Nasdaq 100 Index tumbling nearly 6% in just over a week. That, in addition to tough comparisons with last year, has created a cautious backdrop ahead of Tuesday’s earnings release.
“This isn’t the big acceleration quarter, but I think that they will do slightly better than consensus and give a good September guide,” said Rhys Williams of Wayve Capital Management LLC, adding that Alphabet needs to “directionally talk about what AI is doing to their overall revenue stream.”
Alphabet shares are up about 0.5% in early trading on Tuesday.
Wall Street analysts expect the company to report $84.4 billion in revenue in the second quarter, a 13% jump from the same period last year but marking a deceleration from last quarter. Advertising, which includes the search and YouTube businesses, is expected to bring in $64.5 billion, up 11% compared with last year, helped by Google’s AI improvements to search.
The results, and Alphabet’s guidance ahead of the Olympics and the November US Presidential election — two major events that should benefit ad spending — have read-through to companies including Meta Platforms Inc., Snap Inc. and Pinterest Inc.
Bank of America’s Justin Post expects the results to “set a positive backdrop” for peers. He recently boosted his second-quarter estimate for Alphabet’s search business. “In the near-term, we think revenue upside from AI-driven monetization improvements will be a key 2Q takeaway,” Post said.
Analysts will also be watching Google’s spending. Capital expenditure came in higher than expected last quarter, though Wedbush analysts led by Scott Devitt said that expectations for near-term capex have now “caught up to reality.”
“While a negative surprise related to spending remains a risk for Alphabet (and all of megacap internet), we think the chances are relatively low in 2Q,” Devitt wrote.
The company has spent significantly on developing AI services in its cloud business, which competes with Amazon.com Inc.’s AWS and Microsoft Corp.’s Azure. Cloud was one of the key factors behind Google’s first quarter beat, and Truist analysts led by Youssef Squali expect this quarter’s results to be supported by a sustained performance in cloud as well.
A solid report from Alphabet on cloud would have positive implications for Amazon, Microsoft and even Nvidia Corp., as it may signal that investments in AI chips will need to continue through next year.
Among other developments, this quarter will also mark the last before Anat Ashkenazi takes over as chief financial officer at the end of the month, replacing Ruth Porat. Investors will also be interested in M&A, after cybersecurity startup Wiz Inc. turned down a takeover bid from Google, according to a memo reported by Bloomberg today. Alphabet also recently shelved its pursuit of HubSpot Inc., a customer relationship management software maker, Bloomberg reported previously.
“We are looking for more details around “efficiency” as the theme was more prevalent in the April call and perhaps the new CFO, Anat Ashkenazi, will look to cut a bloated structure even further,” Melius Research analyst Ben Reitzes wrote in a recent note.
Reitzes noted that Google shares have been strong since its first-quarter report amid optimism around “costs, cloud momentum and improvement in AI execution.”
“Management needs to show real commitment to these themes for the stock to keep going,” he said.
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AI
