Alphabet is on the verge of joining an elite group that includes Microsoft, NVIDIA, and Apple, all with a market value exceeding $3 trillion. As of currently, Alphabet’s value is around $2.177 trillion. The stock price is at $176.73 with around 12.4 billion outstanding shares trading at around $181 each. The company is expected to earn $8.60 per share by 2025, trading at a P/E ratio of 21. To reach $3 trillion, the stock price needs to rise to $243 per share, requiring an increase in P/E ratio to about 28 based on projected earnings.
Earnings estimates may need to increase for Alphabet to reach the $3 trillion milestone, although this is unlikely in the near future. Some expansion in valuation multiples would be necessary for the company to achieve this within the coming months. A change in leadership could potentially drive the stock price higher, with the appointment of Anat Ashkenazi as CFO, previously at Eli Lilly, generating optimism among analysts.
The competitive AI landscape presents a challenge for Alphabet, with questions arising about its position. Insights from Evercore ISI analysts suggest that Google’s AI platform, Gen AI, has shown positive results in user behavior. This could lead to increased search volume, better engagement, and monetization, maintaining Google’s market share.
Joining the $3 trillion club reflects the technology giant’s potential, as demonstrated by NVIDIA. However, failing to impress users with its AI capabilities could lead to a decline in Alphabet’s stock value. The competition in the AI sector remains fierce, and Alphabet must continue to innovate to stay ahead.
In conclusion, Alphabet’s journey towards a $3 trillion market value reflects its potential within the tech industry. With the right strategies, leadership, and innovations in AI, the company has a chance of joining the exclusive club of $3 trillion market value companies.
Article Source
https://www.barrons.com/amp/articles/google-stock-price-alphabet-market-value-4b39f6e0
