Alphabet: It's A No-Brainer

Feb. 06, 2020 11:44 PM ETAlphabet Inc. (GOOG), GOOGL30 Comments
Güner Soysal profile picture
Güner Soysal


  • Alphabet is seemingly undergoing a late evolution from the former 'Techie Company' to a future 'Capitalist Company.'
  • While the company was unable to exceed expectations in the last quarter, it seems to be a no-brainer given its increasing focus on monetization, profitability and growth under its new CEO.
  • The tech giant disclosed further information on its revenue generation which underpins its ambitions to become a more transparent and shareholder-friendly company.
  • Furthermore, the valuation seems still to be attractive combined with a rock solid fundamental situation as well as its remaining buyback program amounting to $21B.

1. Foreword

I started coverage of the Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) stock on Seeking Alpha for the first time with my article entitled "Alphabet: Why The New 'King Of Cash' Is A Must-Have Heading Into The Next Decade" dated December 27, 2019.

My decision was based among other things on the fact that a) with the appointment of the new CEO Sundar Pichai, Alphabet could focus more on shareholder value to drive share performance and b) Alphabet could use its excessive net cash position of $117 billion to do so by buying back shares.

Furthermore, I highlighted the (under)performance of the stock compared to the other "tech giants":

Even though I am not a fan (anymore) of comparisons between the performance of different stocks, in the present case it may be helpful to get an overview of the performance of the largest and most important US technology stocks. According to the chart below, only Amazon (AMZN) has delivered a "worse" performance than Alphabet with a year-to-date gain of 19.24 percent (see following chart)."

(Alphabet's year-to-date stock performance in peer group comparison as of December 24, 2019. Source: YCharts)

If you have not yet read my previous article, I would strongly recommend you to do so.

In order to look now to the present and to the future, Alphabet presented its Q4 figures on Monday after-market. While the market reaction was mixed, my first thought was: "Alphabet is undergoing a late evolution from the former 'Techie Company' to a future 'Capitalist Company.'"

In the following I will explain why, by discussing the good and bad parts of the quarterly report.

(Google Search. Source: Pixabay)

In my previous article, I had described the individual business segments and their breakdown, so in the event of any ambiguities in further elaborations, I would like to refer to

This article was written by

Güner Soysal profile picture
Real Financial Dynamics - Investing In Growth In Every Market Phase. Banker, Investor, Investment Advisor, Wealth Manager, Finance Blogger from Germany. Website | Instagram | LinkedIn | Güner Soysal

Disclosure: I am/we are long GOOGL, GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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