On the US stock market on the 26th, Google’s parent company Alphabet is significantly higher. Based on the closing price, the market capitalization exceeded $2 trillion (approximately 316 trillion yen) for the first time. The strong financial results have strengthened expectations that the company will become a major player in the artificial intelligence (AI) field.
Alphabet stock closed 10% higher at $171.95, its biggest single-day gain since July 2015. The market capitalization was $2.15 trillion. The day’s gains added nearly $200 billion to its market capitalization. It was one of the largest single-day price increases in stock market history. Alphabet stock is up 23% since the beginning of the year, outperforming the Nasdaq 100 index’s 5.3%.
In the January-March (first quarter) results announced by the company on the 25th, sales exceeded analysts’ expectations due to growth in the cloud computing division. Growth in AI is driving demand for cloud computing. The company also announced its first dividend and announced an additional $70 billion in share buybacks.
Alphabet’s sales exceed expectations – AI contributes to cloud growth
“Alphabet is very well run, its free cash flow is phenomenal, and it has a huge research and development (R&D) budget,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services. “No one knows if the company will have the best AI product, but it would be hard to bet against the company.”
Alphabet’s market capitalization has reached the $2 trillion level on an intraday basis in 2021 and earlier this month, but this is the first time on a closing price basis.
Original title: Alphabet Joins $2 Trillion Club as Results Show AI Strength (1) (excerpt)
(Updated with analyst comments etc.)
Tags: Alphabet joins trillion market capitalization club growth expected Bloomberg
