Should You Invest in Alphabet?

PHOTO CREDIT: Alphabet

OVERVIEW

Alphabet Incorporation is a company based in the United States. The company specializes in many segments in the tech world. Alphabet operates under the Google brand, which runs the largest search engine in the world and does many other things. Google also operates Google Maps, Pixel, Cloud, Slate, Drive, and Chrome. The company also operates under the Youtube, Waymo, Android, and other brands. The company was founded in 1998.

Why You Should?

1. Google operates and offers a wide range of products and services for its users. From Google Cloud to Google Drive, most of the world’s population is familiar with the company or has used one of the company’s products/services. This ecosystem has benefited the company’s growth in the past and might continue to help it grow in the future.
2. Google is one of the best advertisers in the world. Alphabet makes the most of its revenue from advertisements through its Google and Youtube platforms. Companies will place ads on Alphabet’s platforms as the company effectively targets ads to consumers through many algorithms and the utilization of data. This ad revenue will help the company’s future growth and will also benefit investors.
3. Alphabet uses revenue from its core businesses to invest in new and upcoming industries. One of these industries is the self-driving car industry (Waymo). This future growth venture division within the company will make the company a great long-term investment.
4. Alphabet has positions in some large and growing industries. Some of these industries include the cloud industry, through the Google Cloud brand and the ad industry, through several Google services and Youtube. These industries are all projected to grow in the future, which means that Google’s revenues will continue to grow in the future. This will benefit the company and its investors.
5. Alphabet designs and operates in some of the largest segments in the world. Some of these include Youtube, the largest video content sharing company in the world, Google Chrome, the largest search engine in the world, Android, the largest OS software in the world, and Google Maps, one of the largest and most intuitive virtual GPS service in the world. These large segments drive the company’s future growth.
6. The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company reinvest funds into new industries and has also helped investors, who have seen a skyrocketing stock price. In the financial year of 2019, the company reported revenues of around 161.86 billion and profits of around 34.34 billion Both of these metrics are higher than what the company reported in the financial year of 2018 when they had revenues of around 136.82 billion and profits of around 30.74 billion.

PHOTO CREDIT: Yahoo Finance

Why You Should Not?

1. One thing which might hurt Alphabet and Google in the future is the antitrust lawsuits that have been filed by many states in the United States as well as EU regulators. If these lawsuits go in favor of government regulators, this will hurt the company’s core business.

MY OPINION

In my opinion, I think that Google is a great long-term investment due to the Google/Alphabet “ecosystem”, its futuristic advertising platforms, long-term growth ventures, its position in growing industries, its large market share in many of its segments, and rising revenues and profits. However, antitrust lawsuits and uncertainty surrounding this litigation might hurt the company.