Alphabet Shares On The Stock Market

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It is known as the most famous search engine and browser in the world. Everyone who has the Internet has heard of it. The most popular operating system installed on most smartphones around the world.

It’s all Google. Alphabet affiliate actually, but that’s not the point. A technology giant that has penetrated almost every home on the planet. Google is developing rapidly from year to year and acquires a large number of sub-companies, start-ups and services. The corporation’s annual profit for 2019 amounted to $ 162 billion! At the same time, the market capitalization of Google (Alphabet’s) exceeds $ 1,044 T. It is not surprising that the shares of such companies are at the peak of popularity. Having such an asset in your portfolio, you are not afraid of any difficulties and crises. Although any business has problems, it giants like Google have successfully overcome any obstacle and are growing even faster.
Let’s take a look at the price of the Alphabet shares today: we will analyze the stock situation from different angles, find out how to buy the shares, as well as the prospects of this tech giant.
What is the Google Alphabet?

Larry Page and Sergey Brin worked at Stanford in 1996, creating a digital library for their home university. As a result, they created a new search algorithm with data classification, which went to the domain google.com.

Two years later, they received their first investment as a startup. Two more years after they started selling advertising. The company’s revenue grew rapidly to hundreds of millions of dollars. In 2001-2010, in a fast-growing wave Google has bought more than 100 projects, most of which are running successfully today.
In 2004, Google became a public company by placing its shares on the stock exchange.

Those who want to invest in Google shares should know that the corporation has changed its name since October 2015. As a result of the restructuring, a conglomerate Alphabet Inc. it was born, which, in addition to Google, owns Android, YouTube and other assets. After the official restructuring, Google shares became Alphabet shares, but on the stock exchanges, they continue to trade with the ticker of GOOG.

Google’s main product is the development, use of Internet technologies and software. First, it is a search engine, Chrome browser and Android operating system for mobile devices. There are more than 30 Internet services in operation. In addition, the operation produces mobile devices and is engaged in investment activities. He works in the field of renewable energy technologies and biotechnology.

So how does Google earn $ 100 million a day? First, it is advertising, and 94% of the revenue from participation depends on Ad Words and Ad Sense advertising revenue, and this even in the context of the decline in the average price per click. That is, all the essential services, the search engine Google, Android and YouTube, revolve around advertising.
Additional revenue comes from affiliate programs and the sale of their own devices: Chromebook computers, Chromecast digital media players, Google Cloud services, and Google Play app download addresses.

Google has the advantage of linking ads to search queries, but there is no targeted advertising such as Facebook, where the collection of customer information will be more extensive.
The company is also looking to the future, investing in the development of areas such as artificial intelligence, Waymo self-driving car, GoogleFiber broadband internet access infrastructure.

To date, Alphabet shares are included in the calculation of stock indices such as NASDAQ 100, NASDAQ Comp. S & P 100, S&P 500, and others. The use of stocks in the calculation of the most popular indicators of the US stock market makes them attractive assets for investment.
How can I buy Alphabet shares in the stock market?

The values of the most reliable and liquid companies that provide stable income to their shareholders were called blue chips. If you decided to choose them, let’s try to figure out how to buy shares of the alphabet.

If you’re not a dollar billionaire and aren’t going to get a job at Google anytime soon, the only way to buy stocks is through a CFD broker. All those interested in investing in securities, it is vital to find a reliable brokerage company, without which it is impossible to take advantage of the stock markets.

Therefore, once chosen the broker, open an account, verify by sending the required documents and make a deposit. You now have access to the trading terminal and just minutes away from buying Alphabet shares. Follow these instructions:

Sign in to your Paxforex account on MetaTrader 4;

Click the Market Watch tab or Ctrl + M;

In the symbol list, look for # Google and double-click it, pay attention that the asset is based on the United States, so do not be confused when it is not available in non-operating hours or when the price does not move);

In the new order pop-up window, specify the trading volume and click buy.

Trading terminal is an essential tool for every trader as it allows:

View Alphabet stock price in real time;

Check the historical fluctuation of the Alphabet stock price;

Place an order by craving and short-circuiting the asset;

Analyze the market situation;

Monitor and adjust open positions;

Close positive or negative positions.

Stock CFDs are a great solution for everyone who is willing to take full advantage of any situation in the market, regardless of whether stocks are decreasing or increasing in value.
Google Short

In order to place a short position and sell shares of the CFD Alphabet use this instruction:

Sign in to your Paxforex account on MetaTrader 4;

Click the Market Watch tab or Ctrl + M;

In the symbol list, look for # Google and double-click it, pay attention that the asset is based on the United States, so do not be confused when it is not available in non-operating hours or when the price does not move);

In the new order pop-up window, specify the trading volume and click sell.

Alphabet and Google have an evolving business model

The creators of the American giant managed to create a unique business model that generates billions of dollars.

Google is currently the most powerful search engine in the world. At the same time, the service is free for users – this is the original idea of the developers. It was made possible by competent monetization of advertising using the services of Adwords and Adsense. They allow publishers to monetize their content and entrepreneurs to find potential customers with minimal costs of time and money (advertising with payment for the result).

In addition, with a purchase of YouTube 14 years ago, the alphabet increased its market share in online advertising so much so that it has become the world’s dominant business leader in this area.

Eager to lessen advertising dependence, he has also advanced new technologies such as Chromecast for wireless video transmission, Chromebook for laptops and the Android operating system, which is deservedly considered one of his golden geese.
The complementary nature of advertising and technology has given the technology giant an honorable place in people’s daily lives. At the same time, companies see it as an excellent means of communication to advertise their products and services, thus gaining recognition and better customer orientation.
Google stock price technical analysis

To perform the technical analysis we will use the weekly chart of Alphabet shares.

Google stock price technical analysis

You can see that the buyers pointed to the level of 1580 and tried to approach it twice. In February 2020, they reached 1525 in optimism and volumes, and after the positional battles in a month, they retreated to support levels around 1006.30.

In July 2020, the second attempt, which sellers easily repelled and raised the price below 1100 to high trading volumes. Most likely, short positions were opened at maximum levels.
For today buyers do not have enough strength to make a real assault of the 1580 level, sellers have to work at least short in the short term, driving out the support quotes around 1350. And suddenly buyers are lucky, the uptrend defense will not resist, and the next decline target will be 980. Position Balance in corridor 1350-1530. This is how the situation can be characterized in terms of technical analysis.

Analysts of large investment structures are mostly excited about the prospect of Google’s share price rising above 1600 in the investment corridor for next year. For example, according to JP Morgan analyst Doug Anmuth, the Alphabet stock price should be above $ 2,000, which is 35% higher than the current stock price.
Google Alphabet earnings disappoint in Q1 2020, but outlook reassures

In the first quarter, Alphabet increased revenue by 13% to $ 41.2 billion, which was above market forecasts. The average estimate among financial analysts surveyed by Refinitiv was $ 40.3 bn. Alphabet’s net profit for the three months increased to $ 6.8 bn, while earnings per share (EPS) for the quarter was $ 9.87.

Google Alphabet earnings disappoint in Q1 2020, but outlook reassures

Despite the slowdown in economic growth due to the pandemic, Google’s advertising revenue rose 10% to $ 33.8 bn. However, Alphabet Chief Financial Officer Ruth Porat warned that in March the company recorded a slowdown in advertising revenue, and the second quarter will be a challenge for the advertising business.

Experts expect Alphabet revenue to increase due to the recovery of consumer demand and increased activity of advertisers. Credit Suisse Bank increased its estimate of revenue growth in the search segment (search) for the second quarter of 2020, while YouTube’s revenue forecasts remained unchanged, and the Google Network segment revenue estimate fell. Alphabet EPS is estimated at $ 46.52 in 2020 and $ 54.96 in 2021. The company will report its second quarter results on July 30.
Google’s direct response ads continued to grow

Direct response ads on YouTube (also part of the Alphabet group) remained popular throughout the quarter. Advertising revenue on YouTube was $ 4.04 billion, an improvement of 33% over the previous year. Authorities said that YouTube’s revenue growth remained stable until mid-March, when the coronavirus officially became the global pandemic.
CFO Ruth Porat noted the performance gap between brand and direct response advertising (which is designed to encourage viewers to take action, such as visiting a website or making a purchase). While brand advertising has slowed, direct response advertising ” continued to show strong year-on-year growth throughout the quarter.”
Containment fosters massive online engagement

People are increasingly relying on Google services as existing travel restrictions adjust their behavior, Pichai said.
He noted that Coronavirus research activity was incredible, peaking four times higher than during the Super Bowl. Android app downloads rose 30% between February and March ,and YouTube’s viewing time ” increased dramatically.”
He also stated that 100 million students and teachers now use Google Classroom, double that in early March.
Google search is expected to recover quickly

As shown in the table, Alphabet showed an impressive increase, which is a cornerstone of a company’s health. In the case of the Google matrix, this growth is explained by the large-scale implementation of online advertising. In fact, the ad market shows steady growth rates, which also adds to investor optimism and provides significant support for the value of Google shares today. According to some studies, the global market may grow from $ 333 billion in 2019 to $ 517 billion in 2023. Good news for Alphabet, huh?

Another distinctive feature of Google is that it surpasses the business models of established marketing giants such as Publicis, Omnicom and WPP.
Google EPS analysis

Earnings per share metrics are one of the main variables in defining a share price. A higher EPS designates more value because investors will pay more for a company with higher profits.
EPS is calculated as net income (also known as earnings or earnings) divided by available shares. The number gives an indication of how much profit the Alphabet shareholder gets for each share he owns.

Google EPS analysis

As you can see from the diagram, there was a decline in Google EPS in 2017. This was due to the imposition of fines by the European Union for abuse of a dominant position. It was an extraordinary situation, and in other respects, Google’S EPS growth seems very solid over the past ten years.
Google profitability-margin analysis and Alphabet profitability

Google is one of the most valuable public companies in the world, after Amazon and Apple. As of January 16, 2020, the parent company of Google Alphabet Inc. it became the fourth company to reach a market value of $ 1 trillion.
Powered by the high profitability of its AdWords and AdSense products, Google stands as one of the five most valuable companies in the world. Despite the prospects of some investors that Google’s other projects are reducing the company’s profitability, its diversification from major business groups still leads the company to reach new financial milestones.

Google profitability-margin analysis and Alphabet profitability

Although Alphabet operates an incredible business model that provides sufficient operating margin, there is an overall decline.
Does that mean that a company is in a difficult position?

Google profitability-margin analysis and Alphabet profitability

The reason for the decline in operating profit is quite easy to identify: the company faced increasing expenses. It makes sense as the company is investing in its new technologies, including artificial intelligence and cloud solutions.
Alphabet’s Chief Financial Officer commented that: “we run our business on a long-term basis and not on a quarterly basis. We remain very focused on continuing to improve the user experience in the long term.
Google Alphabet cash flow analysis

The cash flow statement (CFS) classifies how a company properly handles its cash position, indicating how well the company generates cash to cover its debt obligations and support its operating expenses. That is why it is under the constant attention of investors.

Google Alphabet cash flow analysis

Alphabet’s operating cash flow has increased significantly over the past decade, meaning that cash flow is not something shareholders should be concerned about.
And taking into account all subscription services, we can assume that constant cash flow is guaranteed in the long term.
Alphabet shares dividends

Traders working with GOOGL and GOOG shares of this US issuer make gains from fluctuations in the value of the shares. Google Inc. it has not paid dividends since 2006, and Alphabet Inc. the tenancy has not paid dividends since 2015.
It could be due to the desire of the corporation’s management to direct all profits to commercial development, as well as to acquire other companies operating on the Internet. The absence of dividend payments reduces the attractiveness of the issuer’s securities among market participants such as pension funds and other organizations related to collective investments.
How to trade Google shares?

When you create an account with PaxForex, you can trade Alphabet shares with the help of CFDs. CFD trading offers you many advantages, including access to margin trading (1: 4), the ability to take advantage of the falling market by opening a short position and low initial capital requirements.
Alphabet actions in 2020

2020 Google has met with one of the most technologically advanced companies in the world. In addition to the traditional advertising and media business, it is developing in other promising areas. The corporation’s divisions have made significant progress in quantum computing, declaring the achievement of the legendary quantum superiority: computing’s ability to solve problems beyond the control of ordinary computers. Google is one of the world leaders in the development of artificial intelligence. The company’s biotechnology divisions are working to extend life and improve human health.

The real “Black Swan” for the value of Alphabet shares was the coronavirus pandemic, which collapsed financial markets in late February and March 2020. Google lost more than $ 400 in a couple of weeks, falling from an annual high of more than $ 1500 to $ 1053. The alphabet has not seen such a sharp fall in its history.

Alphabet actions in 2020

However, the sharp fall is not so surprising in the context of global markets because, at the same time, the S&P 500 lost more than 40%. No security in the index could be maintained above the 50-day moving average.
Numerous frightening forecasts for the world economy in 2020 are playing against Google’s stock quotes today. The IMF, OECD and influential economists estimate that global GDP could lose as much as 2%, which is even worse than during the 2008-2009 crisis. Naturally, the digital advertising market, which is the corporation’s main market, has also been threatened by a sharp decline.

Google’s future prospects

The development of Google Inc. and Alphabet Inc. in the future is likely to focus on strengthening the Internet business, as well as on mobile technology, in particular, the development of new versions of the Android operating system and applications for it. In addition, it is planned to actively develop a specially created platform, known as Firebase, designed for mobile software developers. The software created with this platform can be installed on portable devices running iOS and Android. All this can significantly improve the earnings forecast of an American company.

In short, it is likely that the advertising system in projects owned by Google Inc. it will be changed. It is due to increased competition on the Internet among a large number of key players, including search services, social networks, video hosting and other companies. The change in the advertising system can lead to an increase in the price dynamics of the Alphabet shares.
The main drivers of quota growth are:

improvements to Google’s ad display system. The company is working regularly on the effectiveness of this product. One of the latest updates is the introduction of artificial intelligence;

revenue from non-search projects: YouTube, Cloud and Play. For example, in the first quarter of 2020, YouTube’s total revenue increased by 23% to $ 4.4 billion. Is more than 10% of the income of the entire holding for the same period;

monetization of other products such as Google Maps. The IT giant’s ecosystem provides opportunities for the development of smaller projects with a wider potential audience.

Google’s future prospects

By The Way, Credit Suisse analysts gave the highest forecast for the price of Alphabet shares among experts surveyed by the service Refinitiv. The consensus price forecast is a few percent higher than the current stock price of $ 1609.5. In this case, 32 analysts recommend buying shares, and four-to keep the shares in the portfolio.
The financial situation of the internet giant is not very worrying. Low debt, high cash flow liquidity and huge cash reserves create a reliable financial cushion during the crisis.

In terms of risks, any asset involves risk. In the case of Google, we should mention a couple of episodes:

The fall in quotations in 2004 (this was due to the release of a large share in the market);

The decline in the company’s profits in 2017, when the European Commission imposed a large fine on the corporation for violation of antitrust legislation.

However, as time has shown, the company can quickly cope with temporary financial problems: the stock price again shows a positive dynamics.
Promising Alphabet projects

The prospects for stability and development of the company Alphabet are guaranteed by a successful business model, where most services are free and used everywhere: the Android mobile operating systems, which are distributed free of charge, and the Google Chrome browser, which is used by 70% of people who connect online. This massive popularity creates a large customer base to promote their own products and generates sources for Big Data databases, thanks to which there are competitive advantages of end-to-end market analysis and super-scalable segmentation, ranging from global advertising campaigns to sniper targets for a particular home or even a person. Cherry on the cake Alphabet inc is producing its own line of Google Pixel smartphones.

The popularity of these phones is constantly growing.

The remaining Alphabet projects, despite their large number, still do not generate significant revenues. The share of the profit generated by these companies does not exceed 0.5% of the total profit. However, a subsidiary company of X Development LLC, a semi-secret laboratory that specializes in “brain treatment”technologies, should be highlighted. By the way, they were considering such projects as a space elevator, a teleport and a flying skateboard. None of these projects have been developed due to lack of economic convenience or lack of necessary technologies.
However, thanks to this company, such revolutionary projects as:

Waymo-autonomous vehicles

Loon-internet distribution using bots

Wing-Bee delivery system

Chronicle Security-security in virtual space and Internet networks

These projects are already in the last stage of testing or are already in the process of commercialization, but due to weak media support, they are highly undervalued by the market. Another promising company that is owned by Alphabet is DeepMind, which is dedicated to the design and development of artificial intelligence, and Google Brain, a research company to train neural networks. In addition, Alphabet has two venture capital funds that buy and invest in promising projects and technologies. Therefore, in 2018 he took over the company Nest Labs, which is engaged in the development and commercialization of IoT technology.

What is listed here is only a small part of the projects and companies in which Alphabet invests and develops.
The companies of this conglomerate have gone beyond the virtual space and occupy all niches free of promising technologies, without fear of the most risky experiments. Thanks to this approach, the real value of the actions of the alphabet can hardly be overestimated, because no one knows which direction will make a breakthrough.
Why invest in Google Alphabet with PaxForex

One way to take advantage of fluctuations in Alphabet’s stock price is to trade CFDs with PaxForex. It allows traders to increase the funds deposited with the help of leverage and, most importantly, makes it possible to benefit from the crisis by placing sales orders.


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