Alphabet (GOOGL) - Get Alphabet Inc. Class A Report shares traded at a record high Monday, lifting the value of the Google parent company past $2 trillion for the first time, joining Apple (AAPL) - Get Apple Inc. Report and Microsoft (MSFT) - Get Microsoft Corporation Report as the only American companies to have passed that historic threshold.
Google shares have gained more than 72% so far this year, while adding more than $1.57 billion in market value to what is effectively the world's biggest advertising company since Sundar Pichai took over as CEO in October of 2015.
Ad revenues across its search engine, web partnerships and YouTube surged 41% over the third quarter to $53.1 billion, while overall Alphabet sales topped $65 billion despite new limits on tracking and privacy imposed by Apple. Cloud revenues also impressed, rising 45% to just under $5 billion.
Group profits jump nearly 20% to $27.99 per share, or just under $19 billion, with operating margins growing by a staggering 8 percentage points to 32% -- some 150 basis points ahead of Tesla, which generated just over $2 billion in operating income.
"The entire online ad ecosystem faces increasingly difficult comps into the fourth quarter, as e-commerce activity normalizes somewhat," said BMO Capital Markets analyst Daniel Salmon in a recent client note. "Moreover, after such consistent outperformance from Google over 18 months, we think investors are beginning to look for an incremental leg to the story."
"With that said, Google should prove resilient owing to YouTube’s leadership in CTV and the continued emergence of Cloud," he added.
Google shares were marked 0.12% higher in late-morning trading Monday to change hands at 2,982.62 each. The stock hit an all-time high of $3,012.30 each earlier in the session that valued the group at just over $2 trillion.
Microsoft passed the $2 trillion level in late June, adding to the astonishing 720%-plus gains booked under CEO Staya Nadella. Apple, the first American company to earn a $2 trillion valuation, passed the peak in August of 2020.
Amazon, with a market value of $1.78 trillion, needs another 12% gain to cross the $2 trillion mark.