Alphabet Inc. Market Underperforms: A Fall in the Google Share Market

The stock of Alphabet Inc underperformed as compared to its competitor- Apple Inc., Microsoft Corp. 

According to MarketWatch, on Monday the Alphabet Inc. market share., -0.15% sank 0.15% to US$2,829.11, on what proved to be an all-around great trading session for the stock market, with the S&P 500 Index SPX, +0.71% rising 0.71% to 4,575.52 and the Dow Jones Industrial Average DJIA, +0.27% rising 0.27% to 34,955.89. The stock's fall snapped a two-day winning streak. Alphabet Inc. Cl A closed US$201.82 below its 52-week high (US$3,030.93), which the company achieved on February 2nd.

Alphabet Inc. is a holding company, with Google, the Internet media giant, as a wholly-owned subsidiary. Google generates 99% of Alphabet's revenue, of which more than 85% is from online ads. Google's other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue. Alphabet's moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), faster Internet access to homes (Google Fiber), self-driving cars (Waymo), and more. Alphabet's operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss. 

The stock underperformed when compared to some of its competitors, such as Apple Inc. AAPL, +0.50% rose 0.50% to US$175.60, Microsoft Corp. MSFT, +2.31% rose 2.31% to US$310.70, and Meta Platforms Inc. FB, +0.80% rose 0.80% to US$223.59. Trading volume (1.7 M) remained 368,135 below its 50-day average volume of 2.0 M.

Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk-free rate changes sharply, the output can look very different.