How to trade Google shares Will the search engine help you

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Contents

How to buy and sell Google shares

Google is one of the most well-known companies in the world. But what is its history, who are its key personnel and how can you buy and sell Google shares? Read on to find out more about Google and how it became the giant it is.

A brief history of Google

Google was founded by Larry Page and Sergey Brin in 1998. The pair came up with the idea when they were working on a solution to find a better search engine than what was available at the time. As a result, Google was developed as Brin and Page set to work creating a search algorithm that would outshine its contemporaries.

The most well-known and arguably most significant algorithm used by Google is called PageRank and, as well as still being in use, it provided the foundation for Google to become the search engine synonymous with the internet that it is today.

Google launched its initial public offering (IPO) on 19 August 2004 in which 19,605,502 shares were issued at a price of $85 per share. Morgan Stanley and Credit Suisse acted as underwriters for the process, and the IPO raised $1.67 billion – which caused Google’s market capitalisation to increase to over $23 billion.

This expansion enabled Google to start looking at acquiring other companies to boost its own growth. Perhaps the most well-known acquisition was YouTube, which Google bought in October 2006 for $1.65 billion in Google stock. Contemporarily, Morgan Stanley has put a $160 billion valuation on YouTube.

In October 2020, Google became the biggest subsidiary of the holding company Alphabet Inc, which was set up by Page and Brin to make the business operations of Google cleaner and more accountable. Other companies and products – aside from Google – which are incorporated under Alphabet are Google Maps, Android, YouTube and Google Chrome.

Google shares: the basics

As part of its IPO, Google was listed on the NASDAQ exchange under the ticker GOOG. Despite the establishment of Alphabet as a holding company, Google still trades under the GOOG ticker. Google’s share price is largely driven by its brand recognition. In fact, Google is currently ranked as the second most valuable brand in the world at $167.7 billion – Apple is first with a $205.5 billion brand value. 1

Equally, the price of Google shares is also driven by the continued growth of the technology sector. Many traders see the online world as a key opportunity to watch in the coming years, with possible innovations such as artificial intelligence (AI) predicted to take the world by storm.

An example of this fact would be that Google bought DeepMind – a UK-based AI company – back in 2020 for a reported $400 million. This is a clear acknowledgement on Google’s behalf that the technology sector will grow into these areas in the coming years, and the seeds of that growth are already being planted.

Google’s share price history

How to buy Google shares

There are several ways that you can get exposure to Google shares. If you wanted to own the shares outright, you would invest in them through a share trading service. Alternatively, if you wanted to trade without ever owning any shares, you could trade on Google’s price movements by taking a position with financial derivatives.

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Invest in Google shares

You can invest in Google shares with IG’s share trading service. By investing in Google shares, you will own them outright, meaning that you will have to pay their full value up front. By owning shares, you can profit through dividend payments, or by selling them if the market price of the shares themselves increases.

To start investing in Google shares with IG, follow these five simple steps:

  1. Open a share trading account: it only takes a few minutes to open an IG account
  2. Log in: once you log in to your IG account, head to your ‘My IG’ dashboard
  3. Fund your account: deposit some funds before you start investing
  4. Find Google shares: once you’ve opened, logged in and funded your account, you’ll be ready to buy Google shares. Open the platform for your share trading account, go to the ‘finder’ panel on the platform, and type in and select ‘Google’
  5. Choose how to buy: on the deal ticket, you’ll see two tabs labelled ‘at quote’ and ‘on exchange’. At quote is IG’s best price from a range of market makers. On exchange means you are interacting directly with the order book of the relevant exchange

Trading on Google shares

Trading on Google shares via derivatives is slightly different to investing in them because you won’t own any shares outright. Instead, you are speculating on the direction in which you think Google’s share price will move. You would go long if you expect the price to rise, or you would go short if you expect the price to fall. There are two ways to trade on Google shares – through contracts for difference (CFDs).

If you decide to trade on Google shares, you have the option to trade on leverage. This means you put down a small deposit – known as margin – and you receive full market exposure. But, you should bear in mind that leverage increases your market exposure because your profit or loss is based on the full size of your position, not the deposit. This means that while you can realise a greater profit, you can also incur a much heavier loss.

Trading on Google with CFDs

A contract for difference (CFD) is a financial derivative with which you agree to exchange the difference in the price of an asset – in this case Google stock – from when you opened your position to when you close it. To go long on Google shares, you would buy the market; to go short on Google, you would sell the market.

How to sell Google shares

After you have invested in Google shares, the time may come when you wish to sell. This could either be to realise a profit or to avoid too heavy a loss. To sell your shares via the IG share trading service, follow these four steps:

  1. Select ‘Google’ in your open positions
  2. Click on ‘sell’
  3. Choose the amount of shares you’d like to sell
  4. Confirm the deal

Google key personnel: who manages the company?

Since Google is a subsidiary of Alphabet, the below table includes directors and chief executive officers (CEOs) of both Alphabet and Google.

John Hennessy Independent chairman of the board at Alphabet
Lawrence (Larry) Page CEO and director at Alphabet, co-founder of Google
Sergey Brin President and director at Alphabet, co-founder of Google
Sundar Pichai CEO of Google, director at Alphabet
Ruth Porat CEO of Google, director at Alphabet
David Drummond Senior vice president, chief legal officer and secretary at Alphabet
Diane Greene Director at Alphabet
Robin Washington Director at Alphabet
L. John Doerr Independent director at Alphabet
Roger Ferguson Independent director at Alphabet
Ann Mather Independent director at Alphabet
Alan Mulally Independent director at Alphabet
Paul Otellini Independent director at Alphabet
Kavitark Shriram Independent director at Alphabet

What is Google’s business model?

The vast majority of Google’s revenue is generated by advertising via its search engine. As well as this, Google’s AdSense places adverts on websites that are listed on its search algorithm. Companies pay Google for these ads, and they can move further up the Google search rankings by doing so – thus increasing the number of visitors to their sites.

In order to facilitate these large advertising revenues, Google needs a lot of users. As a result, Google’s main aim is to connect the world’s information, while making it universally accessible and useful.

In this regard, Google’s business model relies on ensuring that its users feel that the search engine is the best one out there, and it achieves this by constantly scanning and improving its algorithms to fight off competition from other search engines such as Microsoft’s Bing.

Google fundamental analysis: how to analyse Google

Before you choose to buy or sell Google shares, it is important to carry out fundamental analysis to assess whether they are currently overvalued or undervalued. Once you have carried out your assessment, you can decide which position you would like to open.

Traders carry out fundamental analysis by studying a company’s financial records including its profit and loss statement, among other things. However, fundamental analysis also relies on external factors which could affect the value of a market, such as whether users are switching to alternative search engines over Google. Equally, any changes in senior leadership at Google or Alphabet could affect Google’s share price.

Google’s price-to-earnings ratio

The value of Google stock can be assessed by looking at its price-to-earnings (P/E) ratio. Essentially, a P/E ratio explains how much you would have to spend on Google shares to make $1 profit. If a company has a high P/E ratio when compared to its direct competitors, then investors may begin to speculate that its stock is overvalued.

To calculate the P/E ratio, you would need to divide the market value per share by the earnings per share. The earnings per share is calculated by dividing the total company profit by the number of shares it has issued. At the start of June 2020, Google’s P/E ratio was estimated to be in the 25-26 range.

Google’s relative dividend yield

Dividend yield compares the company’s annual dividends to its share price. The relative dividend yield is the dividend yield of a company’s stock compared to that of the entire index. In Google’s case, this would be NASDAQ. However, Google – or more specifically, Alphabet – does not currently issue dividends to its investors, despite much criticism.

In a general sense, to calculate relative dividend yield, you would first calculate the company’s dividend yield by dividing its annual dividend by the current share price. Next, divide the dividend yield by the average dividend yield for the NASDAQ. If the result of this equation is relatively low, it could suggest that the company’s shares are currently overvalued when compared to the shares of its competitors.

Google’s return on equity

Return on equity (ROE) measures a company’s return on shareholder capital. ROE is expressed as a percentage – 16.39% for Google at the start of June 2020 – and it can be calculated by dividing a company’s net income by the total amount of stakeholder equity.

A low ROE could indicate that a company’s stock is overvalued because it would mean that the company is not generating sufficient income relative to the amount of shareholder investment. While the figure of 16.39% may seem low, it should be remembered that some companies have a negative ROE.

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Как торговать акциями Google, используя мощь искусственного интеллекта на Capital.com, лицензированной FCA и CySEC, с маржой и без комиссии.
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Чем известна компания Google?

Alphabet Inc. – холдинговая компания, владеющая Google. Основанная в 1998 году Ларри Пейджем и Сергеем Брином, соседями по комнате в Стэнфордском университете, Google является американской многонациональной технологической корпорацией, которая специализируется на интернет-продуктах и сервисах, включая технологии поисковых систем, технологии онлайн-рекламы и программное обеспечение для этого.

Акции Google стали акциями Alphabet после корпоративной реструктуризации. Alphabet также владеет такими сервисами, как YouTube. Google предлагает широкий спектр продуктов, кроме своей знаменитой поисковой системы. К ним относятся: Gmail, GoogleDocs, GoogleDrive, операционная система Android и популярная линейка смартфонов Google Pixel.

В 2020 году Google объявила, что будет проводить корпоративную реструктуризацию, и Alphabet Inc была сформирована как материнская компания. Торговля в Google теперь более формально именуется торговлей Alphabet из-за изменения акций.

Как торговать CFD на Google

Есть два варианта торговать акциями Google. Во-первых, можно покупать акции компаний на биржах, где они котируются. Например, вы можете оценить стоимость акций Alphabet и купить их на фондовой бирже NASDAQ, тогда вы фактически владеете акциями компании. Это можно рассматривать как долгосрочное вложение, так как инвестор обычно ждет, когда цена поднимется со временем. Торговля акциями Google (торговля акциями Alphabet) популярна , но ей не хватает полезных функций, таких как торговля на марже, которые предлагают CFD.

Торговать Alphabet Inc – GOOGL CFD

Поэтому в качестве альтернативы можно торговать контрактом на разницу (CFD) на конкретную акцию Google и спекулировать на разнице в цене базового актива, фактически не владея им. CFD – это финансовый инструмент, обычно контракт, заключаемый между брокером и инвестором, когда одна сторона соглашается выплатить другой разницу в стоимости ценной бумаги между открытием и закрытием сделки. Вы можете держать длинную позицию (предполагая, что цена будет расти) или короткую позицию (полагая, что цена упадет). Это считается краткосрочной инвестицией или торговлей, поскольку CFD, как правило, используются в более короткие сроки, в отличие от торговли акциями Google.

Основное различие между торговлей длинной позицией с CFD и покупкой ценной бумаги – в использовании кредитного плеча. CFD торгуются на марже, это означает, что трейдер может открывать большие позиции со своим начальным капиталом.

Почему стоит торговать акциями Google с CFD на Capital.com?

Передовая технология ИИ: Новостная лента в стиле Facebook предоставляет пользователям персонализированный и уникальный контент в зависимости от их предпочтений. Если трейдер принимает пристрастные решения из-за собственной предубежденности, инновационная лента новостей (NewsFeed) предложит широкий спектр материалов, чтобы вернуть его на правильный путь. Нейронная сеть анализирует поведение в приложении и рекомендует видеоролики и статьи, которые помогут исправить вашу инвестиционную стратегию.

Торговля на марже: Предоставляя торговлю с маржой (5: 1 для основных акций), Capital.com предоставляет вам доступ к рынку акций помощью CFD.

Торговля на разнице: Когда вы торгуете CFD на акции, вы не покупаете сам базовый актив. Это значит, вы не привязаны к нему. Цена акций Alphabet , ее рост или падение дает возможность спекулировать. Торговля CFD не отличается от того, что называется «традиционная торговля акциями» в части ассоциированных с ней стратегий. CFD-трейдер может открывать короткие или длинные позиции, устанавливать стоп-лосс и лимиты. Независимо от того, является ли ваш прогноз по конкретной акции положительным или отрицательным, вы можете торговать в любом направлении.

Всесторонний анализ торговли: Браузерная платформа позволяет трейдерам формировать собственный анализ рынка и делать прогнозы с помощью гладких технических индикаторов. Capital.com предоставляет данные по обновлению рынка в реальном времени и различные форматы графиков, доступные на десктоп, iOSи Android.

Фокус на безопасности: Capital.com уделяет особое внимание безопасности. Лицензированный FCAи CySEC, Capital.com соответствует всем нормам и обеспечивает безопасность данных своих клиентов в первую очередь. Компания позволяет клиентам выводить деньги 24/7 и хранит средства трейдеров на отдельных банковских счетах.

История компании Google

Google началась как исследовательский проект Ларри Пейджа и Сергея Брина в 1996 году, когда они оба были аспирантами в Стэнфордском университете в Калифорнии. В то время как другие поисковые системы ранжировали результаты по количеству раз, когда поисковые термины появлялись на странице, эти двое работали над улучшением системы, чтобы она анализировала взаимоотношения между веб-сайтами. Разработанная технология стала поисковой системой Google.

Цена акций Alphabet, история

Google финансировался инвесторами «ангелами» и фирмами венчурного капитала, и к августу 2004 года состоялось первичное публичное размещение акций (IPO). На IPO Google выставила 19 605 052 акций по цене 85 долларов за акцию. Со временем Google выросла, купив в 2006 г. YouTube, веб-сайт для размещения видео. В 2020 году Google создал Alphabet, которая стала материнской компанией Google и дочерних компаний Google. Два основателя Google взяли на себя руководящие должности в новой компании, Ларри Пейдж стал генеральным директором, а Сергей Брин – президентом.

Часто задаваемые вопросы

Будучи одним из мировых лидеров в сфере технологий, Google сталкивается с общей конкуренцией со стороны таких технологических гигантов, как Amazon, Apple и Facebook, поскольку их бизнес расширяется и развивается. Google сталкивается с конкуренцией в поисковых системах со стороны Microsoft, с ее продуктом Bing, а также со стороны Yahoo. Учитывая, что он владеет Android, Google также сталкивается с конкуренцией со стороны Apple на рынке смартфонов.

Alphabet Inc. является частью NASDAQ 100, S&P100 и фондового индекса S&P500.

Торговля акциями Google вынуждает осмысливать много факторов. Как и в случае с любой акцией, ежеквартальные отчеты о доходах, а также финансовые результаты общего фондового рынка являются двумя важными факторами, которые необходимо учитывать при принятии решения о том, как могут двигаться акции Google. Специфика Google – это то, как изменяется регулирование в сфере конфиденциальности данных. Инвесторы обеспокоены влиянием регулирования, особенно с учетом того, что усиливается давление со стороны государственных органов как в США, так и во всем международном сообществе. Такие скандалы, как Facebook Cambridge Analytica, высветили опасность и обозначили объем частной информации, которой владеют крупные технологические гиганты, а также оказали огромное давление на компании в технологическом секторе и вынудили их нести ответственность. Если регулирование станет слишком строгим, чего многие опасаются, это может повлиять на Google и курс акций.

На рынке доступны два различных типа акций Google. Есть Alphabet Inc Class A (GOOGL) иAlphabet Inc Class С (GOOG). Это связано с тем, что Google разделил свои акции в 2020 году. Основное различие, за исключением небольшого отклонения в цене, между классом A и классом C связано с правом голоса. Акции класса А имеют право обычного голосования, тогда как акции класса С не имеют права голоса. Акции класса B обладают большими правами голоса, распространяются внутри компании и недоступны на публичных торгах.

Buy Google Stock: How To Invest in GOOG Shares And What To Look Out For

No doubt as an internet browser, you have generated revenue for Google. How? By clicking on Google Ads and AdSense ads that advertisers pay for per click. Because Google’s advertising engine is everywhere on the internet, the biggest challenge of Alphabet (GOOG), the parent of search engine giant Google, is not making money but diversifying its revenues. A broad diversification strategy is starting to pay off. Google Cloud and Google Home are leaders in high growth businesses. And Google’s once lofty plans for self-driving cars, drone delivery services and internet beamed from helium balloons are starting to generate revenues, and could even surpass the colossal ad spending business. Will GOOG stock also fly?

This guide will explain how to buy Google stock, evaluate the best Google stockbrokers, and assess the future performance of the company by looking at how the opportunities and challenges ahead could affect Alphabet’s stock value.

Find in This Article

Best U.S. platform to Buy Google Stocks

The best stock broker in the U.S. for investing in GOOG is Stash Invest. Their platform offers a $50 bonus and their fractional share functionality allows traders to start investing with only $5. They also offer the lowest fees in the market starting at $1 per month for personal investing.

Stash Invest – Invest in stocks with just $5

  • U.S. friendly stock broker
  • Fractional shares available – invest in stocks with just $5
  • Fees as low as $1 per month for basic banking and personal investing
  • Build a portfolio of stocks and ETFs for free
  • $50 bonus available when you deposit $300 within 30 days

Best Platform to Buy Google Shares outside the U.S.

For non-U.S. residents, we recommend the well-regulated broker Plus500. Their platform is extremely secure and offers fund protection to give traders peace of mind. With 0% commissions and low spreads, this is the place to be if you want to invest in Google stocks.

Plus500 – No.1 stock broker for non-U.S. customers

  • Lowest spreads in the market
  • No commissions on trades
  • Listed on the stock exchange and FCA & CySEC regulated
  • Advanced stock analysis tools including historical charts, news, and realtime prices
  • Over 2,000 shares to buy

How to Buy Google Stock in the U.S.

For those looking to invest in Google from the U.S., we recommend the Stash Invest app. This well-reputed broker has made a name for itself with their intuitive mobile app which allows US residents to invest in hundreds of shares with as little as $5, and with the smallest fees in the market starting at $1 per month. Check out our tutorial below to invest in Alphabet stock with Stash Invest.

Step 1: Sign up to Stash Invest

You’ll first need to create your profile by clicking on the link above, and then pressing the “Get Started” button. If you’re on mobile, you may be promoted to download their mobile app. Once done, move on to step 2.

Step 2: Fill out your profile

The broker will then require basic data from you create a custom investment profile. Based on your answers, Stash Invest will give you investment options that are aligned to your risk tolerance.

Step 3: Check your investment options

You must then select your investment options. Your risk tolerance will either be conservative, moderate or aggressive.

Step 4: Deposit funds

The next step is to fund your account. The app counts with a large number of payment options you can use to add funds into your account such as debit and credit card transfers.

Step 5: Profile verification

Next, you will be required to verify your identity by providing the needed documents then create a pin number with 4 digits.

Step 6: Buy Google stock

Search for “Google” in the search box, enter the amount you want to invest then click the “Buy” button.

How to Buy Google shares outside the U.S.

For traders outside the U.S., Plus500 is an excellent platform to purchase Google shares. Traders who qualify for a professional account (with a minimum portfolio value of €500k) can raise their leverage levels, for example, from 1:5 to 1:20 for stock trades, and the broker is well-regulated with an intuitive, secure platform. Read on to find out how to start.

Step 1: Open your Plus500 account

Firstly, click here to open your account. Once you’re on the sign up page, you wil be asked to fill in your basic information such as email, name and telephone number. The broker will give you access to the unlimited demo account. You will also be asked to answer a few questions to determine your risk profile.

Step 2: Deposit funds

When you are comfortable with the platform and feel ready to trade with real money, deposit funds. Plus500 counts with credit/debit card, PayPal and Bank transfer as payment methods.

Step 3: Verify your account

You will then be asked to verify your account by providing proof of id, address, as well as phone and email verification.

Step 4: Buy Alphabet stock

Plus500 offers a wide variety of CFDs on investment instruments, including stocks, ETFs, indexes, forex and cryptocurrencies. Options are also available for the advanced investor. Query Alphabet and the price quotes for the stock, as well as put and call options, appear on the screen.

All stock information and the Buy/Sell commands are displayed on the general stock page for the serious trader who wants to execute quickly. The bottom half of the page displays the price chart and provides access to a broad selection of technical analysis indicators.

80.6% of retail CFD accounts lose money

Should you invest in Google?

Pros to buying Google stock

The world’s favourite search engine is powered by multiple business lines today. The majority of revenues, though, still come from gobbling up global ad spend revenues. Google’s ad revenues have been growing at an annual rate of 14 percent over five years. When deciding whether to invest in Google stock, you should consider all these key growth drivers:

✅Dominant share of global digital ad spend market – As the $273 billion global digital ad spend market doubles by 2022 (eMarketer.com), Google will gain the lion’s share of the revenues. The search engine giant commands over 80% of the global desktop search engine market and 95% of the global mobile search engine market.

The other business devouring ad spend revenues is YouTube, which Google bought in 2006. Video makes up 25% of digital ad revenue. Google does not report YouTube ad revenue, though Robert Baird reports 2020 revenue to be $15 billion, about 10 percent of Google’s $116 billion in ad revenues.

✅Investment in AI driving future growth – AI is behind Google’s plan to take on Tesla. Google is showing off new artificial intelligence (AI) tools that will not only steer its self-driving cars but also create more value in its advertising networks. Although paid advertising click growth is strong, the cost per click (CPC) continues to decline. As one example of how AI can improve ad performance, AI bots are switching to more responsive ads as the deep learning engine identifies which ads work best with search terms.

True to its reputation as a big R&D spender, Google has two think tanks, Google Brain and DeepMind. Google is applying AI in applications ranging from Google Photos and Google Translate to Google Home and Waymo self-driving cars. In the cloud computing business, which is now growing faster than search, Cloud AI is making AI tools easily accessible to enterprises.

✅Google Cloud and other services – Google Cloud uses machine learning to help enterprises make their data smarter. Number three in cloud services, behind AWS and Microsoft, and growing faster than the search biz, Google Cloud will invest billions in data centers in 2020. Google Home, which includes Google Assistant and speakers, is another fast-growing business in this segment. Revenues from Other Services is growing and taking a slice from the ad spend share, jumping 31 percent in the fourth quarter, to 16 percent (up 1.5 percent) of revenues.

Cons to buying Google stock

Low revenue diversification – Ad spending, which grew 23 percent to $136 billion in 2020, comprises 86 percent of revenues. Rising traffic acquisition costs in recent years have contributed to narrower profit margins in 2020. In coming years, Google Other Services and Alphabet’s other subsidiaries, especially self-driving car Waymo, will help widen profit margins.

❌Low China market share – China, the fastest growing country for digital ad spend, is the one country in which Google does not dominate the search engine market. Baidu is the search engine leader in China with a more than 80% market share, while other Chinese players make up most of the remaining 20 percent.

❌Risks of data breaches and scandals – One of Google’s biggest business risks is misusing the growing volumes of data its search engine and cloud centers process. Google, like Facebook, has been involved in data harvesting scandals. In 2020, Google’s foray into instant messaging with Google+ was shut down after the data of 52 million members were exposed.

Google Stock: Current Prices and Summary

Unfortunately, Google Assistant cannot tell us what Alphabet’s stock price will be in one or five years. But we can make a fairly accurate prediction based on a long history of delivering consistent revenue and earnings performance.

When a stock is declining, the first question to ask is whether the cause is wider industry trends or a problem with the actual business. The first is an ideal scenario for investors to pick up an undervalued stock, and fortunately, the current situation of Google. Along with other FAANG stocks (Facebook, Amazon, Apple, Netflix, Google), Google started declining in the final quarter of 2020.

In 2020, both earnings and revenues beat analyst expectations, indicating that there are no serious problems in the underlying business. Google registered a ninth consecutive year of 20-plus percent revenue growth. Owing to its strong top-line growth, Citi has just made GOOG its favourite Internet stock pick. After reporting fourth quarter revenues in February, Alphabet was trading at a price-to-earnings ratio of 22, below its 5-year average of 30. Its price-to-future earnings – analyst estimates of future earnings – was also trading below its average. These attractive valuations could indicate it is a good time to invest in Google stock.

GOOG stock summary

Price $ 170.93 Daily high $ 171.44
Volume 18963658 Low $ 169.50
Variation 12:51 Opening $ 169.71
+ / -% 00:30% Day before $ 170.42

A Brief Overview of the History of Google

Google was created in 1998 by two Stanford university students, Larry Page and Sergey Brin, who created a page rank algorithm that produced more accurate search results than other search engines. Once Stanford’s search engine was made available to the general public, it quickly took off. As search volume soared, Google applied a click-through ad model that used keywords to attract browsers to web pages. This ad spending model now produces $100 billion in annual revenues for Google.

Google quickly established itself as a leading research and development technology lab by making developing innovative research part of its corporate culture. Notably, the search engine empowered employees to spend part of their time developing their own favourite research projects. Under a division called Bets, many projects have both flourished and failed. Successful projects have quickly become market leaders, including leading internet browser Google Chrome, mobile operating system Android and cloud computing player Google Cloud. In 2020, Google placed all of its businesses under the corporate structure Alphabet in order to focus more resources on developing new business lines.

Alphabet Shares: Forecast 2020–2023

2020 – Other services growth

The average 2020 forecast for Google stock is $1,350, with an estimate of $1,100 on the low end and $1,500 on the high end. The company that keeps finding better ways to organize and monetize online information will continue to record strong growth from search and non-search businesses. In 2020, the stock price should reflect higher growth in Other Services businesses. These include Google Cloud and Google Home. Google will spend $13 billion on US data centers this year on its cloud business. It has an enviable advantage in the smart home market with Google Assistant, which is already installed on over 400 million Android mobile devices and hardware products. Google’s Android operating system has an over 70 percent mobile device market share. Google Home Mini is the best selling smart speaker. Median stock growth is expected.

2020 – Growing pains

Alphabet’s ongoing challenge is rising costs. Not coincidentally, research and development costs have doubled to $6 billion in a little over two years. This coincides with the restructuring of Google under Alphabet, whose very purpose was to funnel more resources towards developing innovative new products. Advertising costs will continue to rise. Revenue growth will be strong in 2020 but profit margins will continue to be squeezed until more of Alphabet’s projects drive out of the lab. Analysts expect earnings growth to decline slightly. This could be an opportunity to buy Google shares. Modest stock growth is forecast.

2021 – Alphabet sings

Google’s higher profit margin Other Services revenues from Google Cloud and Google Home could take more than 20 percent of revenues by 2021. Alphabet will start generating revenues from new product rollouts. Google X’s plans to suspend internet antennas 60,000 feet in the sky from helium balloons is no longer a pie-in-the-sky idea. Kenya is the first installation for Loon. By 2021, this business should be a revenue generator. The drone delivery service Wing has deployed in Finland. The 11.2 billion drone market in 2022 will grow at a CAGR of 21 percent to $29 billion by 2027 and Google Wing is sure to have a slice of it (ResearchandMarkets).

2022 – Smart homes and cities

Other Services revenues and profits keep growing. Residents could start moving into Sidewalk Labs 12-acre connected city in Toronto this year. Whether or not Alphabet succeeds in its request to collect $6 billion in property taxes over 30 years, the connected city will be a big boost to Google Home sales. Google has 34 percent of the smart speaker market, which is expected to more than double to $27.8bn by 2022 (IDC). The global smart home market will be worth $55.5 billion (Statista) this year. The global economic slowdown, though, could contribute to modest stock growth.

2023 – The self-driving car

Alphabet subsidiaries Waymo, Wing and Loon will start taking a larger share of revenues. As Waymo officially launched with its commercial taxi service in December 2020, analysts enthused that the driverless car could make up most of Alphabet’s revenues in a decade as 600,000 cars hit the road. UBS valued the taxi service revenues at $118 billion by 2030, not including commercial delivery or logistics. Waymo could gain synergies from its investments in Lyft and Uber. Waymo will generate $1 billion in annual revenue by 2020 and $50 billion in annual revenue by 2029, estimates Bank of America. Strong revenue and stock growth is forecast.

Conclusion

So, should you buy Google stock? Can Alphabet be as successful in autonomous cars, flying drones, and floating internet services as it has been in the internet search and browser businesses? We think Google’s parent’s high spend on research and development will translate into high revenue and earnings growth long term.

When you are ready to buy Alphabet stock, we recommend doing so via a regulated online broker such as Plus500 if you’re a UK customer, and Stash Invest for U.S. customers.

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