2 Reasons Why Alphabet Is Undervalued
Many investors often shun the biggest names in the market because they believe that these companies are so obvious that they cannot possibly be undervalued. But one tech titan has likely been hiding in plain sight: Alphabet (NASDAQ: GOOGL). Even though the general market may currently seem overvalued, here are two reasons why the advertising giant is not.
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Google Cloud is developing into a significant source of revenue and growth for Alphabet. Even though Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) dominate the cloud computing industry, Google still comes in at third with 9% of the market share as of the end of 2020 -- up from 5% in 2017. This segment of Alphabet grew 46% year over year in 2020; its revenue has risen from $5.838 billion in 2018 to $13.059 billion at the end of 2020. The onset of COVID sped up businesses' shift toward the cloud, as working from home and videoconferencing became the norm. Alphabet continues to invest in its cloud platform, creating collaboration tools and a robust data analytics platform for its customers, which should allow it to continue to take some market share from the other large players. While Google Cloud is not currently profitable, the public cloud market is valued at $236 billion, providing a meaningful runway for Google Cloud to grow and develop.
Source Fool.com
