Alphabet is edging to becoming part of the elite US$2 trillion market valuation club on Wednesday according to a Reuters report. The company saw a surge of more than 8% after a quarterly blowout.
Alphabet’s stock was on track for its longest-one-day percentage gain in over two years after trading at about US$2,975.
The company’s stock market value peaked above US$ 2 trillion after the start of the trading session and was last at about US$1.9 trillion. This also included class B shares that don’t trade on the stock market but are held by insiders.
A close above $2 trillion would be the first-ever for the Mountain View, California-based company.
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“The technology sector started 2022 with some of the biggest question marks over it since the dotcom crash more than two decades ago,” said Russ Mould, investment director at AJ Bell. “However, the largest and highest quality U.S. tech names continue to deliver the answers the market wants with big earnings beats.”
The shares of Wall Street’s most valuable companies have seen a surge over the past couple of years thanks to a pandemic-driven shift in how people communicate and work despite the fact that regulators across the globe are trying their best to scrutinize them over allegations of data breaches and antitrust concerns.
In fact, about 20 brokerages raised their price targets on Alphabet’s stock after the company late on Tuesday delivered record quarterly sales that exceeded expectations.
The median analyst price target is now $3,450, 16% above its current price.
Alphabet also announced a 20-to-1 stock split, which will give shareholders 19 shares for every share they hold.
Companies often use splitting stocks as a way of attracting investors by making them much more affordable even though some brokerages like Robinhood Markets do let investors buy fractions of shares which makes this tactic less effective.
“The split will make the shares more accessible for retail investors and likely facilitate inclusion in the Dow Jones Industrial Average (which is somehow still shared price-weighted), but it has no fundamental impact,” J.P. Morgan analyst Doug Anmuth said.
On the other hand, is Meta which is set to report results on Wednesday after the bell. It was last up 1.1%.
Other top gainers on the stock market included Advanced Micro Devices Inc’s share which jumped over 5% after its results topped Wall Street expectations. Then there are NVIDIA Corp, Qualcomm, and Micron Tech all of which saw a surge.