Google Alphabet Hits $2 Trillion Market Capitalization

(Photo by The Verge)

[Asia Economy Reporter Yujin Cho] Alphabet, the parent company of Google, the world's largest search engine, has seen its market capitalization swell to around $2 trillion, fueled by a surge in earnings benefiting from the COVID-19 pandemic.

According to Bloomberg on the 8th (local time), Alphabet's market capitalization briefly surpassed $2 trillion during trading that day. This marks nearly a doubling in size in less than two years since it first reached a $1 trillion market cap in January last year.

Alphabet's stock price showed strength early in the session, surpassing $3,000, but profit-taking near the close narrowed the gains, finishing up 2.21 points (0.07%) at $2,987.03. The market cap touched $2 trillion intraday before closing at $1.98 trillion.

Bloomberg analyzed that the sharp rise in Alphabet's valuation was driven by growth in digital advertising revenue and its cloud business, which propelled the stock rally.

Alphabet posted the highest earnings among the top five U.S. tech stocks based on third-quarter revenue this year. Kim Forest, Chief Investment Officer (CIO) at Bokeh Capital Partners, said, "The valuation is reasonable and growth is strong, so there is ample room for further stock price gains."

According to Bloomberg's compilation, 48 out of 49 analysts issued a 'buy' rating on Alphabet's stock.

Earlier, Alphabet reported better-than-expected strong earnings at the end of last month. Alphabet's third-quarter revenue this year rose 41% year-over-year to $65.12 billion, and net income surged to $21.03 billion, tripling the pre-pandemic third quarter of 2019 ($7.1 billion).

Earnings per share were $27.99, surpassing the market estimate of $23.48 compiled by financial data provider Refinitiv, and revenue also significantly exceeded the market forecast of $63.34 billion.

Advertising revenue from Google and YouTube reached $53.13 billion, up 43% year-over-year. Among this, YouTube revenue increased 43% to $7.21 billion, approaching Netflix's third-quarter revenue of $7.44 billion.

This content was produced with the assistance of AI translation services.