Google's "parent company" reaches $3 trillion in capitalization for the first time

Google parent company Alphabet hit a $3 trillion market capitalization for the first time on September 15, amid optimism about artificial intelligence (AI) and a favorable antitrust ruling.

The company's Class A shares rose 3.8% to $250, while Class C shares rose 3.7% to $250.40 - both trading at record highs.

Including the gain in trading on September 15, the company's stock has risen more than 32% year to date, making it the best-performing stock among the "Magnificent 7" (a group of seven technology companies with the largest market capitalization and broad influence in the US) and surpassing the 12.5% gain of the S&P 500 index.

Thus, after Apple and Microsoft, Alphabet is the next tech giant to reach a valuation of $3,000 billion. Meanwhile, AI chip maker Nvidia, the world's most valuable company, has a market capitalization of up to $4,250 billion.

Tech and AI-related stocks have recently pushed Wall Street's major indexes to record highs, amid growing hopes that the US Federal Reserve will cut interest rates this week.

Oracle's outsized forecast last week was the latest catalyst to add heat to a wave of AI investment.

Kim Forrest, chief investment officer at Bokeh Capital Partners, said technology stocks have led the recent rally, noting that over the last 18 months, maybe even two years, no other sector has generated as much excitement from investors.

The communication services sector, which houses Alphabet, has risen more than 26% year-to-date, making it the best-performing of the 11 major sectors, followed by information technology in second place.

Investor sentiment also improved after a US court earlier this month allowed Alphabet to retain control of its Chrome browser and Android mobile operating system.

The move marks a watershed moment for the company, which has long come under scrutiny for its dominance in the search and mobile ecosystems.

While the court ruling would benefit competitors in Google’s advertising business, not having to divest Chrome or Android removes a major concern for investors, who see them as important pieces of Google’s overall business.

In July, the company's cloud computing division posted a nearly 32% jump in second-quarter revenue, beating expectations as investments in in-house chips and its Gemini AI model began to pay off.

Alphabet is still heavily reliant on search, but with YouTube, Waymo and other products and capabilities Alphabet is developing, investors are starting to see the possibility that it is no longer just a search company, but a company that is expanding into many other areas, said Dennis Dick, chief strategist at Stock Trader Network.

Alphabet shares are trading at about 23 times forward earnings, the lowest of the “Magnificent 7,” and near its average of 22 over the past five years, according to data compiled by LSEG.

This shows that Alphabet's stock is currently both more attractively valued than its peers and has a stable, uninflated price relative to its own history.

This is an ideal combination for many investors looking for growth without paying too high a price./.

(TTXVN/Vietnam+)

Source: https://www.vietnamplus.vn/cong-ty-me-cua-google-lan-dau-tien-can-moc-3000-ty-usd-von-hoa-post1062040.vnp