Everything You Need to Know About Google Stock

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Contributor, Benzinga
January 4, 2023

Google (NASDAQ: GOOGL) is 1 of the largest companies in the world when measured by market capitalization. Trading under its conglomerate Alphabet Corporation, Google is involved in technology development that ranges from projects in mobile smartphones to console gaming. In the past 3 years alone, Google’s stock has risen by almost 85% — and the stock doesn’t look like it will slow down any time soon. With its Workspace, Google Books, traditional Google search engine, Google Books, Google Play and even forays into artificial intelligence, Google is a powerful asset lead by Sunday Pichai that could serve you well as an investor.

Adding Google stock to your portfolio is an excellent way to gain exposure to technology, software and hardware markets with a single purchase. Our guide will help you learn a little more about the history of Google and how you can add this legendary company to your investing portfolio.

Google Stock Timeline

Google’s stock has been on a consistent rise since its initial public offering (IPO) in August of 2004. However, the company has a long history that spans decades and includes multiple acquisitions and restructures. 

Let’s take a look at a few of the most important moments in Google’s history.

  • Date created. Google was originally created as a research project in 1996. The search engine was originally named “BackRub,” a nod to the fact that its technology uses backlinks to determine how important each result is. Google received its 1st round of venture capital funding in August 1998.
  • Incorporation. Google registered the domain www.google.com on September 15, 1997. The company incorporated a year later on September 7, 1998.
  • Went public. Google went public on August 14, 2004. At the IPO, Google’s founders offered 19,605,052 shares at a price of $85 per share. Shares were offered using an online auction format. At the closing of the IPO, Google had a total market capitalization of more than $23 billion.
  • Stock price 5 years later. 5 years later, on August 14, 2009, Google’s stock opened at a price of $230.53 per share and closed at a price of $229.14 per share.
  • Google stock split. Google’s stock has had 2 historic stock splits. The 1st stock split took place on March 27, 2014. The company’s 2nd stock split took place on April 27, 2015.
  • Major acquisitions. Google 1st major acquisition occurred in October 2006, when the company announced that it had acquired major video sharing platform YouTube for $1.65 billion. On August 11, 2011, Google made its largest acquisition to date when it announced that it had acquired Motorola Mobility for $12.5 billion.
  • Stock price 10 years later.  A decade later, on August 14, 2014, Google’s stock opened at $574.60 per share and closed at $573.08 per share.
  • Stock price today. Google’s stock trades just below $100 as of February 2023.

Google’s Highest Historic Price

The highest price ever paid for Google was $2,152 on February 16, 2021.

After a brief dip due to the onset of the COVID-19 pandemic, Google’s stock has been on a steady rebound and has fully recovered its value. Following this spike in value, Google’s increased evaluation was a driving factor that led the Dow to hit an all-time high of 30,218.26. 

Google’s Lowest Historic Price

The lowest price ever paid for Google’s stock was $49.29 per share. This price was reached on September 2, 2004. Like most stocks, Google’s stock price slid from its IPO price of $85 per share a few weeks after its initial offering. 

This is because during an IPO, the goal is to generate as much capital as possible by selling initial shares of stock at the highest price possible. A dip after an IPO doesn’t have any bearing on the long-term success of the company — and Google’s stock price recovered shortly afterwards in November 2004.  

Where to Buy and Sell Google Stock

If you’re interested in investing in Google stock, the 1st step is to open an account with a broker. A stockbroker is a financial institution that is authorized to buy and sell shares of stock on your behalf. Any broker that provides you with access to the NASDAQ exchange will allow you to buy and sell Google stock using its online trading platform.

There are dozens of stockbrokers offering quick, online access to the NASDAQ, New York Stock Exchange and other major exchanges. Some of the factors that you might want to consider when you choose a broker might include:

  • Trading platform. Each broker offers its own unique trading platform. If you’re new to investing, you might want to choose a broker that focuses on offering an intuitive, easy-to-master trading platform.
  • Mobile trading. If you value the ability to invest on the go, be sure to choose a broker that offers you a mobile app that’s compatible with your device.
  • Availability of other assets. In addition to stocks and funds, many brokers now offer access to other types of investments, including cryptocurrencies and precious metals. If you’d like to invest in more than just Google stock, be sure that your broker of choice offers all of the assets you need.

Not sure where to begin your search? Consider starting off with 1 of our favorite brokers below.    

What is Alphabet (Google)?

Everyone knows about the search engine Google. For many, it's a part of their everyday lives. The name phrase “to Google” has even become a verb, with people using it without a second thought. Google provides people with a world of access with just a click of a button. However, its parent company Alphabet has a lot more to offer.

The company owns 92% of the search engine market, making it the most popular search tool available. 

Alphabet was created through a restructuring of Google in 2015 and now owns several subsidiaries, including Youtube, Fitbit, Nest, etc. The company is one of the largest stocks, with a market cap of $1.77 trillion. Because it taps into cloud storage, big data, Google analytics, Google Maps and much more, the firm is well positioned to remain a force on the stock market for many years to come.

After the restructuring in 2015, Alphabet has diversified far beyond its initial standing of being just a search engine. Alphabet generates the majority of its revenue from advertising through Google, Youtube and its other subsidiaries. However, other forms of income include sales of apps and purchases through them, giving it a variety of revenue streams. The company even produces consumer electronics like the Google Pixel smartphone.

Mergers & Acquisitions have had significant involvement in the stock's success, although it has faced its fair share of criticism for its methods. By eliminating rivals and reducing competition, it has faced lawsuits from regulators regarding fair play. At the same time, it’s at the forefront of search engine technology and even remote work with new apps like Google Meet.

Analyst Ratings for GOOGL

Since the start of the year, a number of analysts have altered price targets on Google stock (NASDAQ: GOOGL). However, the majority remain bullish on the stock.

  • Strong Buy - 37
  • Buy - 8
  • Overweight - 3
  • Outperform - 0

Sentiment for the stock is favorable, with no sell ratings. There are no outperform ratings, but that could change over time.

Alphabet has a median price forecast of $140 over the coming 12 months from analysts. The highest rating was $165, and the lowest rating was $113.

In September of 2022, the median price increased over 26%.

Key Statistics for GOOGL

Statistics are, of course, a crucial measure for investors. They help individuals develop an understanding of the company and the potential return on investment they may receive.

Earning yield: The earning yield can be calculated as the earnings per share divided by its current price per share. For example, the current earning yield for Alphabet is 4.99%, meaning it has remained at a positive yield over the last 12 months.

Gross margin: Gross margins measure a company's net sales minus the cost involved in making the goods sold. For Alphabet, the gross margin was 56.91%. On average, a gross margin between 50% and 70% is usually healthy for a business.

Net margin: Net margins shows the net profit as a percentage of revenue made. Alphabet’s net margin came in at 25.89%.

Operating Margin: Finally, we have the operating margin. This is the profit a company makes on each dollar of sales after all variable costs are paid. Operating profit looks very healthy for Alphabet at 27.92%.

Similar Stocks to Google 

This year has been a challenging year for technology stocks, with the majority of stocks losing over 10% of their share price since the start of the year. However, the technology sector has always been a profitable market, with some stocks having excellent long-term potential. 

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Meta Platforms (NASDAQ: META): The company formerly known as Facebook is one of the largest social media platforms. It has numerous products under its umbrella, including Facebook, Instagram and Whatsapp. However, the company has lost billions to the metaverse, floundering where it planned to soar.

Microsoft (NASDAQ: MSFT): Microsoft has been a colossal technology firm and a part of the MAMAA acronym to describe the most significant American companies. Microsoft works in a number of markets, from gaming to the working environment. The company offers it all. The stock has shown impressive momentum since 2020, and a recent drop in its share price may provide a potential buy opportunity. 

Apple (NASDAQ: AAPL): Apple, of course, is one of, if not the most well-known brand worldwide. The hardware company is the face behind products such as the iPhone, Airpods and Mac computers, etc. The stock has always provided safe returns, and over recent years it has shown no signs of slowing down as a tech giant.

Is GOOGL a Good Stock to Buy Now?

Overall, analysts recommend Alphabet as a strong buy. Long-term holders could reap excellent benefits with Alphabet. The company is continuously expanding through acquisitions, generating considerable cash each year. As a result, the stock would be one of the safer bets for investors.

Google Stock Split

Stock splits are becoming a recurring theme, especially among tech companies. Apple Inc. (NASDAQ: APPL), Tesla Inc. (NASDAQ: TSLA), Amazon.com Inc. (NASDAQ: AMZN) and Meta Inc. (NASDAQ: META) announced stock splits in their history.

For the second time in its history, Google — which trades as Alphabet Inc. Class A (NASDAQ: GOOGL) initiated a stock split on July 15, 2022. The 20-for-1 split means Alphabet investors will receive an additional 19 shares for each one they already own. 

If you are a Google investor, you might be wondering what a stock split means to you in terms of valuation and future stock performance. Read on to find out. 

What Happened During the Google Stock Split?

Google’s shares were split 20-for-1, which meant that shareholders received 19 additional shares of each stock owned regardless of the class. Google's shares come in three classes ( A, B, and C). 

Class A shareholders have voting rights (one share, one vote). Class B was reserved for the owners — Larry Page and Sergey Brin — and insiders, with higher voting rights (one share carried 10 votes). Shareholders who had Class C shares had no voting rights. 

It was the company's first stock split since April 2014, when it split its shares 1,998-for-1,000. A day after the stock split was announced during Alphabet's earnings call on February 1, shares spiked to an all-time high of $3,030. As of the close of trading on July 15,  2022 (the day of the stock split), Google's shares traded at  $2,255.34.

Why Did Google Split Its Stock?

One of the primary reasons why companies issue stock splits is to lower the price of a stock to make it more affordable. When shares rise into the upper hundreds or thousands of dollars, retail investors may be priced out, which affects the long-term performance of the stock. 

By splitting shares when prices rise, these companies make individual shares more affordable for retail investors. At the same time, this practice increases liquidity, as shares trade more freely when more investors can access them.

The second possible reason for a Google stock split is to increase the trading volume, thereby making the stock more liquid. Liquidity refers to how quickly a stock can be sold for cash. Stocks that trade at a high price usually have lower trading activity since fewer investors are willing to buy shares.

Because a Google stock split makes a stock look cheaper, more people may want to buy it, which makes it easier to sell as investors would consider it cheap.

Another reason for a Google stock split could be from current economic realities, including Fed rate hikes, and the performance of the stock market. The market has witnessed a sell-off as investors have rotated out of stocks into less risky assets like bonds. Many stocks have seen their valuations cut by more than 50%. 

The sector battered the most by market sell-off is tech stocks, which Google belongs to. Since this year, Google shares have dropped by 30% YTD. Others like Meta, Netflix Inc. (NASDAQ: NFLX) and Amazon have lost 63%, 46% and 43% respectively. 

A stock split could create positive news around the stock, which would boost its share price. For example, upon the announcement of the July stock split, Google shares spiked by 10% the next trading day. 

A stock split could be a strategic play for the company to be included in the Dow Jones Industrial Average (DJIA). The Dow is a price-weighted index that comprises the 30 most valuable companies trading on U.S. stock exchanges. 

Because of its price-weighted composition, companies whose stocks are trading at very high prices tend to get overlooked because it would significantly alter the performance of the index. The price action of an expensive stock would ultimately determine the direction of the index, which could lead to inaccurate readings.

For years, the high price of Alphabet has prevented the stock from being included in the price-weighted Dow Jones Index. A stock split could pave the way for Alphabet to be included in the blue-chip index with little impact on its weightings, while a company like IBM Common Stock (NYSE: IBM) could be dropped as a result. 

This strategy was applied by Apple, which was included in the Dow in March 2015, nine months after it completed a 7-for-1 split (the fourth in its history at that time). Apple is the last major tech company to be included in the Dow. 

Just as a stock split does not fundamentally change the nature of a business, the inclusion in the Dow doesn’t cause a dramatic effect on the stock's long-term performance. It is akin to a PR stunt that is aimed at creating a positive investor sentiment towards the stock. 

Overall, the Alphabet stock split is a positive development for retail investors. It is likely to make the stock more accessible and liquid, which could lead to more buying and selling activity in the future.

Google has strong fundamentals as the company is the undisputed leader in search engine and digital advertising business. Even if investors may be buying shares at a diluted value, a strong possibility exists that they will get value for their investment. 

How Did Google Perform After Its First Stock Split?

Holders of the 1998 existing Class A shares (GOOGL) acquired 1,000 Class A shares and 998 Class C shares (GOOG) as part of the 1998-for-1000 stock split that Google announced in January 2014. 

Shares of Google have increased by nearly 380% since that split from $585 to $2,255.34. If you had invested $1,000 when the first stock split was carried out, the value of your investment would be worth $3,800. 

What Does the Google Stock Split Mean for You?

The initial stock split cut Google's share price in half while ensuring that the company's founders, Larry Page and Sergey Brin, maintained voting control of the business. The new class C stock, which had no voting privileges at shareholder meetings, was created to achieve this. Google stock is now cheaper for retail investors, which is likely to generate more interest in and liquidity for the stock. 

Frequently Asked Questions

Q

Are Google and Alphabet the same company?

A

Google and Alphabet are basically the same. The parent company is known as Alphabet, and the stock trades under that name, but the underlying services almost all have the Google name, and Google is the company that originally purchased brands like YouTube.

Q

Is Google stock a good investment?

A

Google stock can be a very good investment because the company has a good outlook and strong projections for growth.

Q

What was the price of Google stock when it split?

A

The price of Google stock when it split was $2,255.34

Q

Should you buy a stock before or after a split?

A

The main reason that should guide your decision to buy a stock is its long-term prospects and not splits, so your long-term goals will help you make that decision.