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Analysis of Alphabet share price

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Maybe you haven’t yet heard of Alphabet shares and yet these are actually from the group previously known as Google-A. To learn more about these assets and view the share price in real time we recommend you see the real time chart here and read this important information about the company’s activities and a historical price analysis.

Latest news

Alphabet: Share buyback plan despite revenue increase

10/05/2021 - 07h10

Alphabet Group reported an increase in revenue and profit in the first quarter of 2021. It also announced the start of a huge buyback program.

Elements that can influence the price of this asset:

Analysis N°1

In particular, we will keep an eye on Alphabet's diversification into new technological and commercial areas in order to accelerate its growth.

Analysis N°2

Regular acquisitions of other companies can also maximize the growth of that company.

Analysis N°3

Of course, we will monitor the implementation of all future Alphabet innovations, including the artificial intelligence and cloud computing segments.

Analysis N°4

Although a leader in its sector, Alphabet faces relatively strong competition and it is therefore advisable to follow closely the news of these competitors.

Analysis N°5

The regulatory and judicial pressures on Alphabet are also important elements to be taken into account, particularly with regard to data confidentiality.

Analysis N°6

Finally, we will also monitor the amounts invested by Alphabet in research and development. Excessive expenses could harm the group's short-term profitability and penalize it on the stock market.

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General presentation of Alphabet

We would now like to tell you a little more about the Alphabet Group and its activities and sources of revenue. This will give you a better understanding of its challenges and opportunities for future growth.
Alphabet Group Inc. is an American company and a holding company in the technology sector.
To better understand the Alphabet Group's business, it is possible to divide it into several divisions according to the share of revenue they generate and in this way:

  • Firstly, the operation of the Google search engine as well as the operation of the video hosting and distribution site YouTube and the free online email service Gmail remain the company's main activities.
  • This is followed by the development and production of home automation solutions with Nest Labs, including WiFi networks synchronised with automated thermostat, smoke detector and security system programmes.
  • Then there are the biotechnology research and development activities with Calico, which are dedicated to the treatment of ageing and degenerative diseases.
  • The Google X subsidiary provides research services in artificial intelligence or AI.
  • Alphabet also provides investment services with the management of an investment fund dedicated to young companies operating in the new technologies sector with Google Ventures and an investment fund for companies already developed with Google Capital.
  • Finally, the group operates a network infrastructure for Internet access via fibre optics with Google Fiber.

It is also interesting to know the geographical distribution of Alphabet's turnover, which is generated 46.6% in the United States, 5.2% in the Americas, 30.4% in Europe, the Middle East and Africa and 17.8% in Asia Pacific.

Analysis of Alphabet share price
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The major competitors of Alphabet

Although the Alphabet group is of course one of the leaders in its sector of activity, it still faces some major competitors that can influence its performance on the stock market, the main ones being

Facebook 

First of all, the Facebook group is an American company which was created in 2004 by Mark Zuckerberg and which is also a web giant among the GAFAMs which include Google, Apple, Amazon and Microsoft. The company used to be focused on the social network Facebook and that it also acquired Instagram in 2012 and later on, the companies WhatsApp as well as Occulus VR in 2014.

Microsoft 

Another major competitor to Alphabet is the American multinational Microsoft Group, which specialises in microcomputing and was founded in 1975. It is one of the largest market capitalisations on the Nasdaq, along with Apple and Amazon. Microsoft is also present in more than 120 countries and employs more than 148,000 people around the world.

Apple 

Another major competitor of Alphabet is the Apple group, which is also an American multinational specialising in the marketing of consumer electronics, computers and software. The group offers smartphones, connected watches, computers and tablets, as well as multimedia products and services and software for professionals and individuals. Apple currently operates 506 Apple Stores in more than 25 countries around the world and employs nearly 137,000 people. It also owns and operates an online shop where it sells its own devices and software as well as software and products from other manufacturers. It generates tens of thousands of dollars in sales each year.


The major partners of Alphabet

Sanofi

In 2016, Alphabet’s health subsidiary joined the pharmaceutical company Sanofi, in order to create connected objects in the field of the treatment of diabetes.

Chrysler

As part of its work on autonomous vehicles, Alphabet has also created certain strategic partnerships with car manufacturers such as Chrysler in 2016.

GlaxoSmithKline

Always in 2016, Alphabet’s health subsidiary joined the GlaxoSmithKline laboratories in a joint venture whose goal was to create electronic implants to treat some chronic diseases such as diabetes, arthritis and asthma.

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The factors in favour of a rise in the Alphabet share price:

The bullish strategies on the Alphabet share price are increasingly numerous over the long term due to the advantages offered by this stock market asset. Here we offer you the opportunity to learn about the strengths and advantages offered by this group in detail.

Firstly, the Alphabet Group, thanks to Google, is actually the company that dominates the online search sector as well as the sharing of video content, online advertising, mobile operating systems and the use of web browsers. Alphabet also benefits from a great diversity of connected and non-connected products and services which has enabled it to position itself in numerous sectors.

The most profitable activity of the group remains however online advertising with the income generated by Google through this advertising. This income reached over 95 billion dollars in 2017 which represents 86% of the total turnover of Alphabet. Google alone generates over 32% of the total digital advertising sector revenue in the United States; this is equivalent to twice the amount of Facebook. On the international level, Google generated over 32% of the total digital advertising income sector in 2016. Alphabet achieved this through its Adwords, Adsense, and YouTube channels plus the Android operating saystem.   

Concerning internet search online, Google Search remains the most popular search engine worldwide for finding information on the internet. This search engine which is the foundation of the company’s success in fact holds 73% of the market share and achieved 92% for the mobile sector in 2018. This dominance of Google in online search is even more pronounced in Europe where it holds over 90% of the combined market share. 

The Android mobile operating system is of course a major strong point of the Alphabet Company. Over recent years this has experienced increased interest from users and has become the most popular mobile OS throughout the world. It is used on numerous devices from major brands such as Samsung, Huawei, Xiaomi, OPPO, Lenovo and LG. In total Android powered over 74% of the smartphones on Earth in 2018. Due to this singular popularity of the Android system Alphabet has also been able to develop the popularity of its other products and services such as Google Play, Google Music, Chrome and Google Search.

Due to holding the position of Google as leader in these different sectors, the Alphabet Group benefits from numerous advantages against the competition. Firstly, Google records and analyses a huge amount of information about its users and their online search habits. Using this information the group is able to target relevant advertising and adapt products to user requirements far better than its major competitors. Also, its position as leader enables Alphabet and Google to increase consumer popularity through their excellent brand recognition and reputation. Alphabet therefore is in a very strong position regarding its clients, its competitors and its suppliers.

The factors in favour of a drop in the Alphabet share price:

It goes without saying that the Alphabet Group does not only have advantages and also has certain disadvantages and weaknesses that we will now examine in detail.

Firstly, the group has experienced a lot of criticism due to patent infringements, author copyright and user privacy infringement litigation.   

In fact, this giant technological company draws a lot of attention from the media and its competitors and is often criticised for its operations and policies. 

The Alphabet Group is notably in competition with many other technological companies and the patents are often used in numerous products and software. To be able to develop new products and software it is therefore necessary to develop a strong portfolio of patents. Google has already been accused and convicted for a number of patent infringement cases which has led to the payment of hundreds of millions of dollars in damages and interest.

This abuse also concerns copyright. In fact, several lawsuits have already resulted in convictions against Google for infringement of copyright. These convictions have of course had negative repercussions for the image of the Google and Alphabet brands. The same is true relating to private details of its users. Google and Alphabet base their strategies on the collection, storage and processing of all information collected on the users of its products and services and these users are not always informed of modifications to the confidentiality regulations of these products and services. The company is therefore often reprimanded by governments.       

The image of the Google brand, and therefore that of Alphabet, has also been tarnished by some tax evasion scandals. In fact, through the use of various financial devices used for paying less tax, notably in Europe, Australia and other countries, Alphabet has reduced their costs which has led to loud criticism from the public.      

It is therefore the negative publicity that currently poses the greatest threat to the potential of the Alphabet Group. The infractions and abuse that the company has displayed has led to legal problems that weigh heavily on the finances of the company.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

When was the Alphabet Company founded?

Alphabet was created in 2015 as a conglomerate of companies previously owned by Google. The purpose of this new entity is therefore to relieve the historical company of activities that no longer represented its core business, namely online services such as page indexing, messaging or video platforms whose revenues are derived from online advertising. This also made it possible to clarify the company's accounts.

Who are Alphabet's most important shareholders?

The Alphabet Group is partly owned by a few private shareholders that it is interesting to know before trading this stock. These include Larry Page with 26.1% of the capital, Sergey Brin with 25.2% of the capital, Eric Schmidt with 5.3% of the capital, The Vanguard Group with 10.2% of the capital, BlackRock with 6.3% of the capital and Fidelity Investments with 5.4% of the capital.

How has Alphabet's market capitalization evolved over time?

In 2016, one year after its creation, Alphabet's market capitalization was US$555 billion, making it the world's largest capitalization. In 2017, however, the group will be overtaken by the Apple group in terms of capitalization. But since 2020, the group's total market capitalization has exceeded US$100 billion

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