Owning Alphabet shares for the cloud, not the search engine

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What prompts people to buy and hold shares in Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL)? Often times, they own GOOG shares simply because Alphabet is the parent company of the ultra-popular search engine Google.

Source: Benny Marty / Shutterstock.com

Yet Google’s popularity isn’t the only reason to maintain a stake in Alphabet. Indeed, shareholders are also exposed to artificial intelligence (AI) and cloud computing technology.

As we will see, there is also a strong incentive for value investors to own GOOG stocks. Even though Alphabet is a tech company, its stocks are cheaper than you might think.

Moreover, Alphabet is an unexpected environmental, social and governance investment (ESG). Overall, you will find that Alphabet is a multi-faceted business and one that is worth your long-term investment capital.

A closer look at the actions of GOOG

Strange as it sounds, GOOG stock is both expensive and cheap.

On the one hand, the stock is expensive as it broke the $ 2,000 mark this year and is now threatening to hit $ 3,000.

On the other hand, the GOOG stock has not progressed much since the beginning of September. This is in a period of consolidation so the stock could be “Found” for another boost.

Here’s the real kicker, however. Some people might think that all tech stocks are overvalued, but it really isn’t.

Consider this: Alphabet’s 12-month price-to-earnings ratio is 28.41. This implies that the GOOG share is in fact trading at a very reasonable valuation.

So $ 3,000 should be an easy prize target to hit and just might be a stepping stone on the road to $ 4,000 and beyond.

Google slips to second place

Times are really changing in the tech world.

Believe it or not, Google is no longer the most popular website in the world. It has just been dethroned by a site / platform that many young people seem to appreciate.

New data reveals that TikTok has replaced Google as the world’s most visited website.

Even Google’s entire portfolio combined – including search, maps, translation, photos, flights, books, news, and more – couldn’t beat TikTok, which has more than one billion people. active users around the world.

This might frustrate some Americans as TikTok is owned by a Chinese company, ByteDance. Last year, I remember hearing rumors that TikTok poses a cybersecurity threat to the United States, although I couldn’t confirm it.

Either way, it’s possible that the emergence of the Covid-19 pandemic helped propel TikTok to the top spot, as people spent more time indoors and on social media.

The cleanest cloud

Make no mistake, Alphabet is still making a lot of money from Google.

Indeed, during Third quarter 2021, the “research and other” category generated revenue of $ 38 billion, up from about $ 26 billion in the third quarter of 2020.

Still, it’s not a bad idea for Alphabet investors to consider the company’s other lines of business. The cloud is one of the most important, and we can also include it in the ESG category.

This is because Alphabet exploits the cleanest cloud in the industry (or at least that’s what the company claims).

Many tech companies are talking about going carbon neutral, but Google did it in 2007.

Not only that, but Google was the first major company to match 100% of its electricity use with renewable energy. The company has been doing this every year since 2017.

Today, Google / Alphabet is striving to achieve 24/7 carbon-free energy by 2030. With that goal in mind, the company continues to provide cloud infrastructure and tools to reduce energy consumption. environmental impact of customers.

The result on GOOG Stock

Google is still a popular website, but it wasn’t meant to be number one forever.

That’s great, because Alphabet isn’t just limited to the Google search engine.

You might not have expected GOOG stocks to represent an ESG investment or a value game. Alphabet is full of surprises, but don’t be surprised if the stock price exceeds $ 3,000 then $ 4,000 in the near future.

At the time of publication, David Moadel had (directly or indirectly) no position in any of the stocks mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

David Moadel provided compelling content – and sometimes crossed the line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga and (of course) InvestorPlace.com. He is also a chief analyst and market researcher for Portfolio Wealth Global and hosts the popular YouTube financial channel Looking at the Markets.

The post office Owning Alphabet shares for the cloud, not the search engine appeared first on Investor place.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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