Alphabet, owner of Google, reaches value of US$ 2 trillion

Alphabet, the parent of Google, broke the US$ 2 trillion (R$ 11.1 trillion) barrier in market value on Monday (5) for the first time, according to information from Bloomberg.

After a period of weeks oscillating between lows and moderate increases, the company’s shares rebounded, driven by growth in advertising earnings and cloud deals.

Alphabet has the best performance this year among the five largest US technology stocks and its Class A shares, which in the US market are equivalent to the Brazilian stock exchange’s common shares, have accumulated five sessions of rallies.

In the club of companies that touched the US$ 2 trillion mark are Apple and Microsoft, which also reached the value this year.

The owner of Google had surpassed the US$ 1 trillion (R$ 5.5 trillion) house for the first time in January 2020, also according to the Bloomberg survey.

Analysts attribute the valuation of the company’s shares to a combination of a price considered still cheap compared to higher growth rates compared to its peers, such as Amazon and Microsoft.

Of the 49 analysts followed by Bloomberg who cover the stock, all but one recommend buying Alphabet stock.

“Given Covid’s especially compelling exposure, the ever-increasing engagement and monetization of YouTube, and the march of the GCP [Google Cloud Platform] moving toward profitability, we see solid reasons to own the asset,” wrote Brad Erickson, an analyst at RBC Capital Markets in late October, when Alphabet reported that its third-quarter sales beat estimates.

The company’s earnings per share are expected to reach nearly $130 (R$723) in 2023, according to the average of analyst estimates compiled by Bloomberg, or nearly triple the $44 reported in 2018.

In addition to the success of the cloud segment being close to the sweet spot, Waymo, a technology development company for autonomous cars that owns Alphabet’s stake, could add another stimulus to the company’s market expansion, according to Mandeep Singh, an analyst at Bloomberg Intelligence .

Investors interested in surfing the rally of Google’s owner may even make gains, but the valuation is expected to be only moderate in the coming months, according to Matt Peron, research director at Janus Henderson Investors, in an interview with Bloomberg.