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Yet Google’s popularity isn’t the only reason to retain a stake in Alphabet. Indeed, shareholders are also exposed to artificial intelligence (AI) and cloud computing technology.
As we will see, value investors also have a major incentive to own GOOG stock. Even though Alphabet is a tech company, its stock is cheaper than you might think.
Moreover, Alphabet is an unexpected environmental, social and governance (ESG). Overall, you will find that Alphabet is a multi-faceted company and one that is worth your investment capital in the long run.
A Closer Look at GOOG Stocks
Strange as it may seem, GOOG’s stock is both expensive and cheap.
For one thing, the stock is expensive as it passed the $2,000 mark this year and is now threatening to hit $3,000.
In contrast, GOOG stock hasn’t made much progress since early September. It is in a period of consolidation, so the stock could be “base” for another leg up.
Here’s the real kicker, though. Some people might think that all tech stocks are overvalued, but that’s really not the case.
Consider this: Alphabet’s 12-month price-to-earnings ratio is 28.41. Which implies that GOOG stock is actually trading at a very reasonable valuation.
Thus, $3,000 should be an easy-to-achieve price target and could simply be a stepping stone to $4,000 and beyond.
Google slips to second place
Times are truly changing in the world of technology.
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 most visited website in the world.
Even Google’s entire portfolio combined – including search, maps, translate, photos, flights, books, news and more – couldn’t beat TikTok, which has more than a billion users. active users worldwide.
This might frustrate some Americans because TikTok is owned by a Chinese company, ByteDance. Last year, I remember hearing rumors that TikTok was a cybersecurity threat in the United States, although I was unable to confirm this.
In any case, 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
Don’t get me wrong, Alphabet is still making a lot of money from Google.
Indeed, during Third quarter 2021the “research and other” category generated $38 billion in revenue, up from about $26 billion in Q3 2020.
Still, it’s not a bad idea for Alphabet’s investors to consider the company’s other business segments. The cloud is one of the most important – and we can also include it in the ESG category.
This is because Alphabet operates the cleanest cloud in the industry (or so the company claims).
Many tech companies talk about going carbon neutral, but Google made it happen in 2007.
Not only that, but Google was the first major company to match 100% of its electricity consumption with renewable energy. The company has done this every year since 2017.
Today, Google/Alphabet is striving to achieve 24/7 carbon-free energy by 2030. With this goal in mind, the company continues to provide cloud infrastructure and tools to reduce the environmental impact of customers.
The Basics of GOOG Stocks
Google is still a popular website, but it wasn’t destined to be number one forever.
That’s perfectly fine, because there’s so much more to Alphabet than the Google search engine.
You might not expect GOOG stocks to be an ESG investment or a value play. Alphabet is full of surprises, but don’t be surprised if the stock price goes above $3,000 and then $4,000 in the near future.
As of the date of publication, David Moadel had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
David Moadel has delivered compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga and (of course) InvestorPlace.com. He is also the Chief Analyst and Market Researcher for Portfolio Wealth Global and hosts the popular YouTube financial channel Looking at the Markets.
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