Google’s parent company has hit a stock market value of $2tn (£1.6tn) as investors reacted to the declaration of its first dividend alongside strong results on Thursday.
Alphabet shares rose 10% in early trading on Wall Street on Friday to give the technology group a market capitalization (a measure of a corporation’s value) of more than $2 trillion. The last time Alphabet hit that level in intraday trading was in 2021, but it has yet to close above that benchmark after a day of trading.
Alphabet shares rose after it reported results on Thursday that beat analysts’ expectations. Microsoft also reported strong numbers on Thursday, amid heavy investments in artificial intelligence, with investors pushing the company past the $3 trillion mark, a level it already surpassed this year.
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Alphabet’s quarterly numbers included better-than-expected results from its core Google search business, as well as its YouTube platform, and strong numbers from its cloud business, which has been boosted by training and operating cloud computing models. artificial intelligence. The company also announced its first dividend.
Russ Mould, chief investment officer at AJ Bell, an investment platform, said joining Alphabet as a dividend-paying technology company was a “sign of the times.”
“Big tech companies have enjoyed stellar growth over the past decade, and while most remain highly innovative, their cash flows have become so strong that there are plenty of cash left over after reinvestment in the business to reward employees.” shareholders,” he added.
Alphabet joins a trio of publicly traded companies in the United States with valuations of more than $2 trillion: Microsoft at more than $3 trillion; Apple, at $2.6 trillion; and Nvidia, the main supplier of chips for AI products, with just over $2 trillion. Apple also surpassed the $3 trillion mark last year.