For Immediate Release
Chicago, IL – December 17, 2024 – Today, Zacks Investment Ideas feature highlights Alphabet GOOGL, Uber UBER, Lyft LYFT, Tesla TSLA and Amazon AMZN.
Google's Generational Breakout: 5 New Catalysts
Google Company Overview
Zacks Rank #3 (Hold) stock Alphabet, best known for its search engine dominance (owns 94% of theglobal market, is one of the most innovative companies on Earth. However, the stock has been a mediocre performer over the past few years due to its massive market cap (it’s hard to move the needle on the $2.4 trillion behemoth). Nevertheless, Google’s tentacles are beginning to reach far beyond its lucrative search business.
Google’s New Growth Avenues
Despite Google’s dominance in search and video through its YouTube platform, Wall Street already deeply understands these businesses and they are priced into the stock. Wall Street is the ultimate discounting device, and investors and analysts are constantly on the lookout for higher earnings growth in the future. Though many management teams in Google’s position would sit back and be “fat and happy,” management keeps the pedal to the metal and discovers new growth areas.
5 Future Catalysts for Google
Today, we will focus on fie fresh growth areas that will drive Google’s earnings growth and shares much higher into the future, including:
Waymo
Waymo, Google’s driverless robotaxi offering has debuted in several US cities, including San Francisco. When Waymo launched in August 2023, ride share kings Uber and Lyft accounted for a 66% and 34% market share, respectively. A little more than a year later, Waymo has tied Lyft at ~22% of the rideshare market (accounts for GOOGL’s geofenced zone only).
Waymo’s rapid success and LYFT and UBER’s falling stock prices hint that Google and Tesla have an opportunity to disrupt the massive rideshare market over the next five years.
Willow: A Ground-Breaking Quantum Computing Chip
Every so often, there’s a monumental leap in technology. Last week, Google delivered in the form of its “Willow” quantum computing chip. The company announced that Willow performed a five-minute computation that would “Take one of today’s fastest supercomputers 10 septillion years.”
For context, this number written out looks like this:
10,000,000,000,000,000,000,000,000!
Gemini Generative AI
Alphabet’s foray into the generative AI space got off to a rough start when its large language model (LLM) proved error-prone and inaccurate in many cases. However, Google’s genius tech team has fixed the issues and is now adding new features such as image capabilities, coding support, and app integration. Though the AI market is still very much up for grabs, Google has a clear advantage due to its massive cash hoard, existing technology, and integration opportunities to other sides of its business, such as its Android operating system.
Google Cloud
Google is gaining market share in the cloud computing space, driven by continued strength in its Google Cloud and Workspace platforms. As Google continues to expand its cloud footprint worldwide, the Google Cloud Platform is becoming a growing slice of the business. The Google Cloud segment generated revenues of $11.35 billion in the third quarter, which represents a 28.8% jump year-over-year. Using Amazon Web Services (AWS) as a precedent, investors should be excited about Google’s Cloud inroads. Many investors would be shocked that AWS represents a larger slice of Amazon business than even its wildly popular e-commerce business.
Google Nest
Google is capturing market share in the relatively new “smart home” market. The company is growing across its smart home Nest portfolio, which includes products like smart speakers, displays, streaming devices, thermostats, smoke detectors, routers, doorbells, and locks. Nest is yet another Google product that benefits from crossover into legacy products. With voice and AI emerging as the “next big thing” in computer interaction, revenue from this business is likely to gain traction.
Technical View: GOOGL Base Breakout
Google’s bullish innovation arch translates to the stock’s price action. GOOGL shares are breaking out of a long, multi-month base structure. Fibonacci extensions suggest that GOOGL could easily be a $250 stock in 2025.
Conclusion
Google is one of the most dominant and innovative tech companies worldwide. Though the company owns the legacy search market, inroads into new and explosive growth industries should excite investors into 2025 and beyond.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Naming Top 10 Stocks for 2025
Want to be tipped off early to our 10 top picks for the entirety of 2025?
History suggests their performance could be sensational.
From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Lyft, Inc. (LYFT) : Free Stock Analysis Report
Uber Technologies, Inc. (UBER) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
