Alphabet Inc. has become the third company with a market capitalization of more than $2 trillion, which has benefited from the Corona epidemic boom in search advertising, which allowed it to join Apple and Microsoft.
Google’s parent company briefly crossed the $2 trillion mark for the first time, driven by a rebound in digital ad spending and growth in its cloud business. Its market value doubled from a trillion dollars in January 2020 to two trillion dollars in November 2021, according to what was reported by the “Arab Gateway for Technical News”.
Alphabet is the best-performing company this year among the top five US tech stocks by sales, with a 70% advance largely driven by growth in Google’s advertising business.
The company’s recent rise contributed to a 73% gain in the stock market, or about $850 billion, since the beginning of the year.
The company’s boom came on the back of advertising activity that proved more resilient to last year’s downturn than many had expected, and which rebounded strongly in 2021 as economic growth picks up.
The shutdowns drove the search giant’s revenue down for the first time on an annual basis, with a 2% drop in the second quarter of last year. But the downturn was followed by an unexpectedly strong recovery later in the year, with merchants turning to e-commerce and digital advertising to make up for lost sales.
This year it was supported by a broader rebound in search advertising, including in sectors such as travel.
Shares of Alphabet are up 7% in the past two weeks, since the company reported surprisingly strong earnings.
The company announced third-quarter sales on October 26 that beat analyst estimates. It generated a whopping $65.1 billion in profits. This reflects strong advertiser spending.
The company stated that its revenues rose by 41%, while its profits jumped by 69%. Google’s search engine saw a slight increase in profits, which jumped to $37.9 billion from $35.8 billion in the previous quarter.
YouTube, another Alphabet subsidiary, posted a profit of $7.2 billion last quarter.
And while its market capitalization has crossed a new milestone, the company’s value – a closer measure of the value of its core business – has fallen slightly. After deducting more than $100 billion from net liquidity on its balance sheet, it came to about $1.93 trillion on that measure.