Alphabet eyes $2 trillion value after blowout results
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[February 03, 2022] By
Akash Sriram and Subrat Patnaik
(Reuters) - Google parent company Alphabet
Inc advanced nearer to joining peers Apple Inc and Microsoft Corp in the
elite $2 trillion market valuation club on Wednesday as the search
giant's shares surged more than 8% following a blowout quarterly report.
Last trading at about $2,975, Alphabet's stock was on track for its
largest one-day percentage gain in almost two years, easing concerns
around owning Big Tech following a sector-wide selloff in the past few
weeks.
Alphabet's stock market value peaked just above $2 trillion after the
start of the trading session, and was last at $1.97 trillion. That
includes class B shares that do not trade on the stock market and are
held by insiders.
A close above $2 trillion would be the first ever for the Mountain View,
California-based company.
"The technology sector started 2022 with some of the biggest question
marks over it since the dotcom crash more than two decades ago," said
Russ Mould, investment director at AJ Bell. "However, the largest and
highest quality U.S. tech names continue to deliver the answers the
market wants with big earnings beats."
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Shares of Wall Street's most valuable companies have soared in the past
two years, driven by pandemic-led shifts in how people work and learn,
even as regulators around the world scrutinize them over allegations of
breaches of privacy and antitrust concerns.
At least 20 brokerages raised their price targets on Alphabet's stock
after the company late on Tuesday delivered record quarterly sales that
topped expectations. The median analyst price target is now $3,450, 16%
above its current price.
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The Google logo is pictured at the entrance to the Google offices in
London, Britain January 18, 2019. REUTERS/Hannah McKay/File Photo
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Alphabet also announced a 20-to-1 stock split, which will give shareholders 19
shares for every share they hold.
Splitting stocks is a method companies use to woo investors by making them more
affordable. However, some brokerages, such as Robinhood Markets, allow investors
to buy fractions of shares, making the tactic less effective.
Tesla Inc and Apple split their stocks in 2000 to make their shares more
appealing to mom-and-pop investors.
"The split will make the shares more accessible for retail investors and likely
facilitate inclusion in the Dow Jones Industrial Average (which is somehow still
share price-weighted), but it has no fundamental impact," J.P. Morgan analyst
Doug Anmuth said.
Facebook parent Meta Platforms, which is set to report results on Wednesday
after the bell, was last up 1.1%.
Adding to the rebound in tech stocks, Advanced Micro Devices Inc's shares jumped
over 5% after its results topped Wall Street expectations. Rivals Nvidia Corp,
Qualcomm Inc and Micron Technology Inc also rose.
(Reporting by Akash Sriram, Subrat Patnaik and Medha Singh in Bengaluru;
Additional reporting by Noel Randewich in Oakland, California; Editing by Will
Dunham and Saumyadeb Chakrabarty)
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