Home Mutual Funds Why Alphabet Stock Looks Poised For a Price Record On Friday

Why Alphabet Stock Looks Poised For a Price Record On Friday

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Key Takeaways

  • Google-parent Alphabet shares surged more than 11% in extended trading on Thursday after a blowout first quarter earnings report.
  • The stock surge bumped after-hours market cap to greater than $2 trillion as the company announced its first-ever dividend of 20 cents per share and additional $70 billion buyback.
  • Alphabet shares sit poised to open at a new all-time high on Friday, potentially not facing selling pressure until reaching the psychological $200 level.

Shares in Google parent Alphabet (GOOGL) soared more than 11% in extended trading Thursday afternoon, after a trifecta of good news for investors—its first-ever dividend, an eye-watering stock buyback program, a blowout quarterly earnings report.

The late afternoon price surge bumped Alphabet’s after-hours market capitalization to over $2 trillion, and likely set the stock up for a new price record on Friday.

Why Did Alphabet’s Stock Soar?

The board of Mountain View, California-based tech giant approved dividend of 20 cents per share and authorized the repurchase of an additional $70 billion in stock. And that’s making investors happy as dividends return reward shareholders while buybacks offer stock price support.

Looking under the hood, Google’s total advertising sales in the quarter tallied $61.66 billion, up from $54.55 billion a year ago and higher than the $60.3 billion expected, indicating a recovery in the advertising business, which has seen a slowdown in recent years amid a reduction in brand spending caused by heightened inflationary pressures.

YouTube advertising revenue in the period of $8.09 billion rose 21% from a year earlier and came in ahead of the $7.72 billion expected by analysts, while Google Cloud generated revenue of $9.57 billion, topping forecasts of $9.35 billion.

“Our results in the first quarter reflect strong performance from Search, YouTube and Cloud,” said Alphabet CEO Sundar Pichai in the company’s earnings release.

The company continues to invest heavily in artificial intelligence (AI), adding new generative AI features and expanding partnerships with leaders in the space to adapt to changes in the way consumers seek online information. Earlier this month, Alphabet announced that AI market darling Nvidia’s (NVDA) next generation Blackwell platform will be available to its Google Cloud customers in the first half of 2025.

Watch Out For This Psychological Price Level

Taking a look at the weekly chart, Google shares have recently consolidated above a horizontal line connecting two prior record highs around $150. Moreover, the 50-day moving average remains well above the 200-day moving average, indicating the stock remains in a strong uptrend.

Given the price is poised to open at a new all-time high (ATH) on Friday following the company’s better-than-expected earnings report, it may not encounter any significant selling pressure until reaching the psychological $200 level.

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As of the date this article was written, the author does not own any of the above securities.

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