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Alphabet Hits $2 Trillion Mark Due to AI Advancements
Google parent company Alphabet achieved a significant milestone on Friday, surpassing the $2 trillion market capitalization mark. This accomplishment was largely driven by a surge in stock prices, influenced in part by the company’s advancements in generative artificial intelligence.
Stock Performance and Market Cap Growth
Alphabet’s Class A and Class C shares both reached new 52-week highs on Friday, with each experiencing a 10% increase shortly before the markets closed. This surge made Google the top performer in the Nasdaq and one of the leading stocks in the S&P 500, ultimately boosting Alphabet’s market capitalization to approximately $2.14 trillion by Friday afternoon.
Thus far this year, Alphabet stock has risen by more than 23%, and over the past 12 months, it has seen an impressive growth of over 59%. Prior to Alphabet, only Apple, Microsoft, and Nvidia had crossed the $2 trillion threshold.
Financial Performance and Analyst Expectations
Following the release of its quarterly results, which exceeded analysts’ predictions, Alphabet reported a nearly 60% increase in profits in the first quarter compared to the same period the previous year. CEO Sundar Pichai attributed this success to strong performances in search, YouTube, and cloud services, stating, “We are well underway with our Gemini era and there’s great momentum across the company. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”
Moreover, Alphabet’s announcement of a first-ever cash dividend of 20 cents per share further bolstered investor confidence. The company’s sales also saw a notable uptick, rising by 15% to $80.5 billion.
Future Outlook and Investor Sentiment
Despite a brief stall in February and March, Wall Street analysts remain optimistic about Google stock’s trajectory. Analysts from Jefferies, JPMorgan Chase, Bank of America, and Raymond James have all raised their price targets for Google to $200 per share following the strong earnings report, up from previous estimates ranging between $165 and $180.
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