GOOGL - Google: Plenty Of Upside Left

2024-05-08 16:33:55 ET

Summary

• Alphabet, Google's parent company, delivered strong Q1 earnings with 15% growth and improved profitability.
• The company is firing on all cylinders, with Search Engine, YouTube, and Google Cloud showing signs of accelerating growth.
• Planning to allocate $50B towards capital expenditure to building its generative AI infrastructure, the company is cutting costs in other areas to blunt the effect on profitability.
• Google announced its first-ever dividend alongside a $70B buyback to attract new investors.
• The stock is no longer a bargain, but with a price target of $192, there remains plenty of upside left for attractive returns.

At the beginning of the year, I included Alphabet , the parent company of Google ( GOOGL ) ( GOOG ), among my Top 3 Picks for 2024 given the negative sentiment of falling behind in the AI race and the threat of disruption of its core search engine, driving the valuation to dirt-cheap territory despite double-digit growth expectations.

As I follow what I preach, I loaded up on the stock during the pullback after Q3 and Q4 earnings at around $125 per share, and given the strong performance, Google is today my single largest holding, with ROI north of 30%....

For further details see: