Alphabet Stock: 6 Things You Must Know Before Investing

Learn all you need to know about the search engine titan to fuel your investment.

By Holly Humbert

Edited by Michael Kurko

Updated May 28, 2024

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In the ever-evolving landscape of tech giants, Alphabet Inc. stands tall as one of the most influential companies globally, alongside Meta, Amazon, Apple, and Microsoft.

Its search engine is a household name, but the company is so much more than that. Alphabet's ventures into cutting-edge technologies mean its stock has been a staple for investors seeking growth and stability.

Before you start investing in this tech titan, let’s examine its history, financial track record, and experts' predictions about its future.

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An overview of Alphabet

Google was founded in 1998 by Larry Page and Sergey Brin, who were both PhD students at Stanford University. This project took on many different versions before it settled in as the search engine we know as Google.

The company was reorganized in 2015, with Alphabet becoming the parent company and Google becoming a subsidiary. Operating in the technology sector, Alphabet owns two of the most visited websites on the Internet: Google and YouTube.

Beyond that, the tech giant offers other innovative products and services, including Google Maps, Android OS, and the revolutionary self-driving car project, Waymo.

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How Alphabet stock is performing

Alphabet's stock shows resilience, navigating through market fluctuations with quick rebounds. Despite occasional dips, the stock has generally trended upwards.

As of Sept. 4, 2024, Alphabet's stock has increased 15% over the last year. While the stock doesn’t currently pay dividends, stocks increasing 15% in 12 months make for happy investors.

Understanding Alphabet’s financials

Revenue is the total amount of money generated from sales of goods and/or services. Alphabet brings in a lot of money each year, and 2023 was no different. Total revenue for 2023 was over 307 billion dollars.

Net income is the profit left after expenses. In 2023, Alphabet's net income was almost $74 billion. That means after they paid all their employees, operating costs, and other liabilities, there was almost $74 billion left over. In 2024, Alphabet's net income for the quarter ending June 30 was $23 billion.

Earnings per share or EPS represents how much profit each stock share represents. For Alphabet stock, the EPS for 2023 was $5.80. The basic EPS as of June 30 was $1.91.

From all accounts, Alphabet is doing well financially. The numbers increased from 2022 to 2023 as well and continue to trend upward.

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What’s ahead for Alphabet

Experts are optimistic about Alphabet's stock, with most saying it's a strong buy. Analysts predict that prices will go up and that this stock will outperform the market.

Some believe Alphabet is currently undervalued, meaning the market will correct that in the future by increasing in value. Others anticipate Alphabet's work on artificial intelligence, healthcare, and self-driving cars.

How to buy Alphabet stock

If you want to add Alphabet stock to your investment portfolio, you have two options: buying stock through a traditional brokerage account and buying fractional shares.

When you buy stocks through a traditional broker, you are buying a whole share at the current stock price. If you want three shares of Alphabet, and each share costs $157, it will cost you $471 to own three shares.

Fractional shares are a way to own a partial share in a company. If you can’t afford an entire share or want to diversify your investing portfolio, fractional shares let you purchase based on the dollar amount you want to spend vs. the current cost.

You can start investing today by using one of the best online brokerage accounts.