Cloud Computing Fuels Tech Giants' Market Value Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy GOOGL?
Source: NASDAQ.COM
- Cloud Market Growth: As demand for AI services surges, cloud computing has become the fastest-growing business segment for tech giants like Alphabet, Microsoft, and Amazon, propelling their market values towards $5 trillion.
- Accelerated Investments: Each company is investing hundreds of billions annually in cloud infrastructure to meet AI demand, with expectations that these investments will significantly enhance their market share and profitability in the coming years.
- AWS Profit Contribution: Amazon's AWS accounted for 66% of the company's operating income, highlighting its critical role in profit generation, and is expected to drive Amazon's market cap above $5 trillion in the next few years.
- Market Valuation Potential: With Microsoft valued at approximately $3.2 trillion, achieving a price-to-earnings ratio comparable to its peers could boost its stock price by over 17%, bringing it closer to the $5 trillion target.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 349.940
Low
305.00
Averages
374.25
High
400.00
Current: 349.940
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Investment Shift: Given Apple's shortcomings in AI, analysts suggest investors consider other rapidly growing companies like Nvidia, Microsoft, and Alphabet, which are demonstrating strong growth driven by cloud computing and AI demand, making them potentially more attractive investment options than Apple.
See More
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- Investment Return Expectations: Amazon CEO Andy Jassy highlighted that the growth of the cloud computing business necessitates higher infrastructure investments, which are expected to yield significant financial returns in the coming years, driving the company's market cap upward.
- Microsoft's Valuation Advantage: With a current market cap of approximately $3.2 trillion, if Microsoft trades at a 30 times forward earnings ratio like its peers, its stock price could rise over 17%, bringing its market cap closer to $3.8 trillion, further propelling it towards the $5 trillion mark.
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See More
