Alphabet Stock Off to Strong Start in 2020
January 06 2020 - 2:23PM
Dow Jones News
By Alexander Osipovich
Shares of Google parent Alphabet Inc. lagged behind other big
technology companies last year, but they have rallied to start 2020
as investors expect new Chief Executive Sundar Pichai to put his
stamp on the tech giant.
Alphabet stock was up 2% in afternoon trading Monday, boosted by
an analyst upgrade, outperforming the broader market .
The company's shares are up 3.7% so far this year. By
comparison, Apple Inc. has gained 1.5% in 2020, while Facebook Inc.
has risen 2.6% and Microsoft Corp. is up 0.3%.
If that pattern holds, it would mark a reversal from 2019.
Alphabet shares rose 28% last year, an impressive performance by
any measure. But most of Alphabet's peers did even better: Apple
rallied an astonishing 86% in 2019, while Facebook gained 57% and
Microsoft climbed 55%.
Monday's gains in Alphabet shares were fueled by a bullish note
from Pivotal Research Group, which upgraded the company's stock to
buy from hold. The research firm said it expected Mr. Pichai to
share more of Alphabet's wealth with shareholders, either by
increasing buybacks or potentially instituting a dividend payment
for the first time in the company's history. The note also
highlighted growth opportunities in areas such as cloud
computing.
"We don't have a crystal ball as to what happens in the Pichai
regime -- but when thinking rationally, we see many reasons that a
change is going to come with management alignment with
shareholders," Pivotal analyst Michael Levine wrote in the note
detailing the upgrade.
Alphabet investors face a variety of risks, including antitrust
scrutiny from the U.S. government. The company's online-advertising
revenue may also be vulnerable to broader macroeconomic headwinds
if tensions in the Middle East spook the markets.
Mr. Pichai took over as CEO of Alphabet last month after the
company's co-founders Larry Page and Sergey Brin stepped back from
active management of the business. Mr. Pichai had previously been
CEO of Alphabet's core Google unit.
Many observers expect Mr. Pichai to focus on Alphabet's
lucrative advertising business instead of "moonshot" bets like
building self-driving cars.
Write to Alexander Osipovich at
alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
January 06, 2020 14:08 ET (19:08 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Alphabet (NASDAQ:GOOGL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Alphabet (NASDAQ:GOOGL)
Historical Stock Chart
From Sep 2023 to Sep 2024