US$1 trillion market cap for Google parent
It is the third technology giant in elite valuation club, after Apple and Microsoft
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A Google "gumball" machine during the 2020 CES in Las Vegas earlier this month. Shares in its parent company, Alphabet, closed at US$1,450.16 on Thursday, valuing the tech titan at above US$1 trillion for the first time.
PHOTO: REUTERS
NEW YORK • Alphabet hit a milestone on Thursday, as a rally in the stock took it above a US$1 trillion (S$1.3 trillion) valuation for the first time, solidifying the dominance of technology and Internet stocks as the biggest titans of Wall Street.
Shares rallied in the last half hour of trading to close at US$1,450.16, up 0.8 per cent on the day.
With the gain, Alphabet became the newest member of an elite club to trade with the historic 13-digit market capitalisation.
Only two other US names are past the threshold: Apple, valued at about US$1.38 trillion, and Microsoft, at US$1.27 trillion.
Globally, the list is topped by Saudi Aramco, Saudi Arabia's national oil company, which went public last month and has a market cap of about US$1.8 trillion.
Amazon.com flirted with the level last year, but the e-commerce company would have to rise more than 7 per cent for its current valuation of US$931.1 billion to return above US$1 trillion.
The four firms are by far the largest on Wall Street, and their size gives them an outsized impact on overall market direction. Together, they represent more than 15 per cent of the weight of the S&P 500.
The rest of the market is, at best, hundreds of billions of dollars away from trillion-dollar valuations. The fifth-largest US stock by market cap, Facebook, has a valuation of US$632.9 billion.
The biggest company outside the tech or Internet sector is Berkshire Hathaway, in sixth place, valued around US$559 billion.
Alphabet's move above the level is just the latest step higher for the Google parent company.
Shares are up about 40 per cent from a June low, with the rally largely fuelled by optimism over its 2020 prospects, particularly with respect to ad revenue. Alphabet will report fourth-quarter results on Feb 3.
Evercore ISI has raised its price target on the stock to US$1,600 from US$1,350, writing that it expects the company will continue "to compound on its defensible dominance in Search and video advertising with YouTube".
Earlier this week, Deutsche Bank raised its own target to a Street-high view of US$1,735, writing that the stock "trades too cheaply". The firm cited more ad product launches, an expanded stock buyback programme and "improving competitiveness in the Cloud business".
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