After a strong 65% rise in Google shares in 2021, analysts expect a more modest result in 2022. Is it time to buy shares of the tech giant or are they overpriced today?
In 2021, the growth of Google shares has surpassed the growth of the market and blue chips.
Shares in Google's parent company Alphabet (GOOGL, GOOG) posted first-class gains in 2021, up 65%. This is well above the market average and also above the growth of other large technology companies of similar market capitalization.
Thus, the stock indices S&P 500, Dow Jones, and Nasdaq Composite in 2021 grew by 26.8%, 18.7%, and 21.3% respectively.
Shares of the world's most valuable company Apple (AAPL) jumped 33.7% last year, Microsoft (MSFT) 51.3%, Meta Platforms (FB) 23%, and Amazon (AMZN) just 2.3 % %.
However, it is worth noting that the growth of Google shares was stable until the beginning of September, in October they fell by 8%, and since the end of December, they have lost 7.25%.
With talk of inflation and rising wages, labor shortages, and the upcoming rise in interest rates, the growth of tech giant stocks in 2021 is being questioned and some investors may be wondering if it's time to buy Alphabet stock and should we expect it to rise in 2022?
Google business continues to "gain momentum"
According to Alphabet's available financial data for the 9 months of 2021, which ended on September 30, the company's total revenues grew by more than 45%: from $125.63 billion (for the same 9 months of 20202) to $182.3 billion; profit almost doubled: from $25 billion to $55.4 billion.
Last year, YouTube was named the most popular platform in the US, surpassing Facebook, according to the Pew Research Center social media rankings.
YouTube ad revenue in Q3 2021 grew 43% year-over-year to surpass $7 billion for the first time.
In 2021, Google accounted for 28.6% of all digital advertising spend globally, according to eMarketer. Meta Platforms, the parent company of Facebook and Instagram, came in second with a 25.2% share.
Google Cloud's Q3 2021 revenue rose 45% to $4.99 billion, while its operating loss actually halved to $644 million from $1.21 billion in the same quarter of 2020.
This is a respectable result for the world's third-largest cloud company, compared to Amazon's AWS cloud revenue growth of 39% and Microsoft's Azure 50% revenue growth in the same quarters.
Google stock - growth in a pandemic, inflation and high rates
Google's stock chart from 2020 proves that the company's business will continue to grow in the face of both the emergence of new strains of coronavirus and the record inflation that was observed in 2021.
And while Google shares may be temporarily affected by market volatility, the company's business will continue to grow even with several interest rate hikes in 2022.
Global leadership in digital advertising, less reliance on Apple OS updates than Meta, and a growing cloud business have helped Google grow from a $1 trillion market cap. in 2020 to nearly $2 trillion. ($1.84 billion) today.
And while Alphabet's stock may not repeat the astounding gains it saw last year, it remains a solid tech stock for investors to profit in the long run. Trading Signals and Forecasts for Google Stocks.
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