Google Stock Leaves $2,000 In The Dust

Alphabet, better known as Google (NASDAQ: GOOGL) has had a hot start to 2021. A 90% rally from March’s lows through the rest of last year has been added to considerably already. Not bad for a $1.5 trillion company.  Asides from benefiting from the overall upwards trend in tech that COVID has played a large role over the past twelve months, Google’s Q4 earnings from earlier this month have also helped to bring a fresh bid to shares. In particular, a 24% jump in year on year revenue is nothing to be sniffed at, especially when it comes as part of a major beat on analyst expectations across the board.

This is helping to underpin the latest phase of the rally which has shares up more than 20% in less than a month. As part of this move, they’ve crossed beyond the $2,000 mark for the first time, a major milestone and one that’s been noted by Wall Street and investors alike.

Price Target Raises

In the aftermath of this report, Jefferies quickly reaffirmed their Buy rating on the stock while upping their price target from $2,150 to $2,400. This suggests there’s upside of around 15% to be had even from Tuesday’s closing price. Morgan Stanley mirrored the move, as did JPMorgan, with all three sell-side heavyweights being particularly impressed with revenue performance from the company’s Search and YouTube streams. Google’s cloud revenue was also highlighted as a core pillar, with its margin expected to continue improving as the post-COVID recovery trundles along.

Since then, shares have gone on to hit fresh all-time highs, with more around the corner if the folks over at Loop Capital are to be believed. Just yesterday, they shed their Hold rating on the stock and moved Google shares to a Buy. A fresh price target of $2,525, and the 20% upside it represents, should make a strong case for a long position among those of us still on the sidelines.

Loop Capital’s analysts Rob Sanderson and Alan Gould said in a note to clients; "core advertising trends were surprisingly strong across Google properties in each of the past two quarters and we expect momentum will continue.” They also expect travel-related ads to show "incremental lift by mid-year."

Getting Involved

For investors thinking about getting involved, there’s probably no such thing as a bad time to buy Google. They own more than 90% of the world’s online searches, have no direct competitor, and have such a firm grip on their market share that they’ve become a verb in their own right. Shares are at all-time highs and pushing into blue sky territory but their price-to-earnings ratio is only in the mid 30s. Considering the three and four-digit P/E ratios being touted by many other tech stocks right now, there’s some comfort in the knowledge that it’s hard to call Google overvalued at current prices.

The other big heavyweight that’s often mentioned in the same breath as them is e-commerce giant Amazon (NASDAQ: AMZN). Both are attractive long term holds, but in recent months Google is the out and out winner. Amazon’s shares have essentially traded sideways since August, as the COVID driven wave in online shopping starts to crest. They’re also dealing with significant political and antitrust concerns, concerns which for the most part aren’t on the radar for Google.

With that in mind, there’s every reason to think Google will continue to outperform in the near term, and is just as likely to do so in the long term as well.