Alphabet Inc. has just joined the $ 1 trillion club.
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The parent company became the third technology company in the exclusive club and grew approximately $ 8 billion in value on Thursday. The $ 1 trillion market cap is only exceeded by Apple Inc.
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at $ 1.38 trillion and Microsoft Corp.
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at $ 1.27 trillion.
Alphabet's rise was fueled by strong expectations for advertising sales, a number of acquisitions highlighted by YouTube, and expansion into emerging markets such as cloud computing and self-driving cars. Last month, Google CEO Sundar Pichai succeeded co-founder Larry Page as CEO of Alphabet.
Google’s core ad revenue, which accounted for 84% of Alphabet’s total annual revenue in the last quarter reported, has led to constant annual revenue growth of 20% over the past decade. The company reports fourth quarter earnings on February 3.
According to a study by Dow Jones Market Data, the Silicon Valley company made the jump from $ 900 billion to $ 1 trillion in 47 trading days.
Apple became the first $ 1 trillion worth of tech members in August 2018. The stock continued to rise in 2019, up 86%. Gene Munster, managing partner of Loup Ventures, a longtime Apple analyst, went so far on Monday that he predicted that Apple could surpass the $ 2 trillion mark in 2020. Microsoft followed in the first half of 2019.
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exceeded $ 1 trillion in one intraday trade in September 2018, but never closed a trade session above the mark and never officially reached a $ 1 trillion market cap. Facebook Inc.
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is the next closest to the brand, but it still has a lot to offer: it closed at an all-time high of $ 632.4 billion on Thursday, largely thanks to a 51% increase in its stocks in 2019 , Evercore ISI raised its social networking giant stock target to $ 280 from $ 235 on Monday.
All the more remarkable are the profits of large technology companies facing antitrust investigations by the U.S. Department of Justice and the Federal Trade Commission into their economic performance. The combined market value of the federally audited companies – Apple, Alphabet, Amazon and Facebook – is nearly $ 4 trillion.
And it could go higher. Wedbush Securities analyst Daniel Ives predicts that the so-called FAANG companies will increase industry stocks by another 20% by 2020.
"The market is currently not rational with valuations. It is simply the best place to put your money in relation to other assets," Beth Kindig, an independent tech analyst in San Francisco, told MarketWatch. "I don't think that investors look closely at what their investment dollar is worth as earnings remain unchanged and shares close at higher prices. Therefore, they are currently paying much higher prices for shares. "