Google parent Alphabet (GOOGL) has long been a winning investment, rewarding those who held on since its public debut over two decades ago. Now, as artificial intelligence (AI) reshapes the tech landscape, analysts believe GOOGL stock has even more room to grow.
Investors recognized Google’s potential when it went public via a Dutch auction in 2004. Even then, the company offered the best internet search engine, paving the way for near-total market dominance. However, Google didn’t stop at search. It expanded aggressively, launching services such as Gmail, Google Maps, and the Chrome operating system. These products solidified Google’s position as a global internet powerhouse.
From search engine to tech giant
One of Google’s most consequential moves came in 2006 when it acquired a small but promising startup called YouTube. At the time, many questioned the wisdom of paying $1.7 billion for what seemed like an internet fad. Nearly two decades later, YouTube has proven its worth, generating $32 billion in advertising revenue in 2023 alone—roughly 10% of Alphabet’s total revenue.
Google’s ambition didn’t stop there. As smartphones became ubiquitous following Apple’s (AAPL) launch of the iPhone, Google entered the mobile market with its open-source Android operating system. Android’s widespread adoption helped Google cement its dominance beyond desktops and into the palms of billions worldwide.
By 2015, Google had grown into such a vast and diversified company that it restructured under the umbrella of Alphabet. Today, Google maintains a staggering 90% market share in global search, while Android powers roughly 70% of smartphones. Yet, Alphabet’s future success depends on competing with Microsoft (MSFT) and Amazon (AMZN) in AI and cloud-based enterprise services—areas where analysts remain optimistic about its prospects.
Alphabet’s staggering stock performance
For long-term investors, GOOGL stock has been nothing short of a financial windfall. According to research by Hendrik Bessembinder, a finance professor at Arizona State University’s W.P. Carey School of Business, Alphabet has generated over $1 trillion in lifetime wealth creation. Only Apple, Microsoft, and Exxon Mobil (XOM) have created more wealth for shareholders.
But what does this mean for an individual investor? Alphabet’s long-term performance has significantly outpaced the broader market. Over its entire lifespan as a public company, GOOGL stock has delivered an annualized total return of 23.7%—more than double the S&P 500’s 10.6% return.
Even looking at the past 20 years, GOOGL stock has remained a strong performer, with a 20.4% annualized total return, nearly doubling the S&P 500’s gains. A $1,000 investment in GOOGL stock two decades ago would now be worth approximately $41,000. In contrast, the same investment in an S&P 500 index fund would have grown to about $7,600.
Looking ahead, analysts continue to see upside for Alphabet stock. Among 61 analysts surveyed by S&P Global Market Intelligence, 35 rate it a Strong Buy, 14 call it a Buy, and 12 consider it a Hold. This consensus recommendation of “Buy” indicates strong confidence in the stock’s future performance.
With AI, cloud computing, and continued digital expansion driving its next phase of growth, Alphabet remains well-positioned to stay among Wall Street’s top-performing stocks for years to come.
