Alphabet Inc. (GOOG), headquartered in Mountain View, California, is a leading global technology company formed as the parent organization of Google. It manages Google’s core internet products alongside other innovative ventures. Alphabet’s diverse operations include digital advertising, cloud computing, artificial intelligence (AI) research, hardware, and more.
The company continues advancing its technological innovations and expanding its market presence, maintaining strong dominance in search, advertising, and cloud services worldwide. It has a massive market capitalization of $3.86 trillion, which classifies it as a “mega-cap” stock and a member of the coveted “trillion-dollar club.”
GOOG’s stock reached a 52-week high of $328.67 on Nov. 25, but is down 4.1% from that level. With strong financials and rapid advances in AI, the stock has gained 47.6% over the past three months. In stark contrast, the Vanguard Mega Cap Index Fund (MGC) has gained 6.6% over the same period. So, GOOG is the clear outperformer during this period.
Over the longer term, this outperformance persists. Over the past 52 weeks, GOOG’s stock has gained 84.8%, while it is up 82.3% over the past six months. On the other hand, the Vanguard Mega Cap Index Fund is up 15.7% and 17.2% over the same periods, respectively.
The stock has been trading above its 50-day moving average since late June and its 200-day moving average since early July.
Investors have been supporting the stock because they believe the mega-cap company will continue to grow robustly, despite its already massive size. The company faces the tailwinds of AI and cloud operations, which are expected to bolster its prospects.
For instance, Morgan Stanley analysts believe that Alphabet’s on-demand business will grow by 15% or more, with an additional $50 billion in net backlog expected over the next year. If these two conditions are met, Google Cloud’s revenue growth rate could approximately double from 25% in 2025 to more than 50% in 2026.
As Google Gemini’s user base grows, so does the company’s demand for tensor processing units (TPUs), which are said to be better at handling AI workloads than traditional GPUs. There are also reports that Meta Platforms, Inc. (META) is considering shifting to Google TPUs to power its data centers.
