Alphabet (GOOGC.US) shares reached levels near $100 today. The share price is the lowest since February 2021, the stock has pierced the minimums of June this year:
- Alphabet Inc. is a holding company whose subsidiary is Google;
- Google accounts for 99% of Alphabet's revenue. More than 85% comes from online advertising;
- The advertising industry has seen a massive slowdown this year due to cost-cutting by service providers;
- Google is seeing significant revenue from sales of apps and content on Google Play and YouTube;
- Alphabet's Moonshot investments are in another betting segment, where it is betting on technology that improves health (Verily), faster Internet access in homes (Google Fiber), autonomous cars (Waymo) and more;
- Recent market surveys in the U.S. have shown that consumers are shifting their interest toward groceries , record poor performance in the services sector and appliance sales which is hitting Alphabet's business fundamentals;
- High interest rates and record inflation is an environment that is not positive for scaling business in the face of risk aversion and both households and businesses keeping spending to a minimum;
- Products like the Chromebook, Pixel and smart home services (Nest, Google Home) do not seem to be consumers' preferred expenditures in a period of inflation;
- Google's growing share of revenue is made up of cloud fees and licensing revenue, which helps the company maintain higher margins.
Alphabet shares, W1 interval. The stock has been moving in a downward trend since the beginning of this year. Jerome Powell's speech at Jackson Hole shook off Wall Street's dreams of faster monetary easing, which coincided with a local price peak near $125. The price is approaching the 200-session average, which runs at $92. However, the $100 border may be a psychological support zone for bulls and the last 'bastion' of defense against an influx of supply. Source: xStation5
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