Sep. 01, 2023 11:41 AM ET Alphabet Inc. (GOOG), GOOGL
- Due to better-than-expected business performance, Google stock is up 53% this year and still trades at a lower P/E than peers like Microsoft and Apple.
- Google’s impressive earnings growth prospects make it an attractive investment.
- Google’s continued dominance in search, revenue from YouTube, and potential in cloud and AI contribute to its strong business performance.
- I’m raising my 2024 price target for GOOGL to $162, with the potential for the stock to reach $200.
This article discusses the investment case for Alphabet Inc. (GOOGL), highlighting why it is considered an attractive investment in the technology sector. Here are the key points from the article:
- Strong Performance: Google stock has seen a remarkable 53% increase in value this year, driven by better-than-expected business performance. Despite this increase, the stock still trades at a lower price-to-earnings (P/E) ratio than peers like Microsoft and Apple.
- Earnings Growth Prospects: Google is expected to show impressive earnings growth in the coming years. Analyst estimates for 2023 and 2024 suggest strong earnings per share (EPS) growth, making it an appealing investment compared to other tech giants.
- Dominance in Search: Google has maintained its dominance in the search engine market, outperforming competitors. Its search business remains a key revenue driver.
- Revenue from YouTube: YouTube has become a significant revenue source for Google, with annual revenue reaching $40 billion. The platform’s growth benefits both consumers and content creators.
- Potential in Cloud and AI: Google’s cloud business has turned profitable and is expected to continue growing. Its wealth of data and expertise in AI position the company for further success in these areas.
- Price Target: The author raises the price target for GOOGL to $162 by the end of 2024, with the potential for the stock to reach $200 if it outperforms earnings estimates.
- Share-Class Consideration: The article suggests buying Google Class A stock (GOOGL) over Class C stock (GOOG) due to potential differences in buyback focus.
In conclusion, the article makes a compelling case for investing in Google, emphasizing its strong business performance, earnings growth prospects, and attractive valuation relative to peers. The author believes that Google is a good buy at current prices and could offer substantial returns in the future.
