Alphabet stock has helped early investors retire millionaires

From Nasdaq: 2024-04-08 12:15:00

Alphabet, the parent company of Google, has helped early investors retire as millionaires. The stock IPO’d at $85 in 2004, reaching $100 on its first day and closing at $100.34. Stock splits in 2014 and 2022 mean a $20,000 investment then would now be worth close to $1.2 million.

Alphabet’s main revenue generator is Google, with an estimated global market share of 90% in search. Despite a challenging advertising year in 2023, Google’s search revenue hit $175 billion. The company’s cloud business saw strong growth, with revenue up 26% to $33.1 billion.

YouTube, another major business for Alphabet, made $31.5 billion in revenue in 2023. The platform has over 100 million subscribers for its premium and Music services, contributing about $15 billion to its revenue. YouTube’s revenue-sharing model with content creators has been a profitable strategy.

Despite trading near an all-time high, Alphabet is considered inexpensive, trading at around 22.5 times forward P/E and 12.5 times enterprise value-to-EBITDA ratio. The company’s strong position in artificial intelligence (AI) is a key reason to invest in the long term, with AI benefiting its cloud service business and potential for future profit.

The Motley Fool Stock Advisor team has identified 10 stocks for investors, excluding Alphabet, that could yield significant returns. The Stock Advisor service offers guidance on building a successful portfolio, with regular updates and new stock picks each month. Suzanne Frey, an Alphabet executive, is a board member of The Motley Fool.



Read more at Nasdaq: Could Alphabet Stock Help You Retire a Millionaire?