Google stock forecast and price prediction

Key points

• Alphabet has had three consecutive quarters of net profit growth.
• GOOG generates revenue from ads, subscription-based products and cloud fees.
• The Big Tech company is a leader in advertising spend.

Alphabet is the parent company of Big Tech companies such as Google and YouTube. Google is a longtime leader in online search. Most of its revenue comes from advertising. In recent years, Google has aimed to be at the forefront of artificial intelligence developments.

Google stock price

Like many tech stocks, Alphabet saw its shares shrink in 2022. GOOG lost nearly 40% of its value that year. 

The stock has performed remarkably well since then, reaching new highs in 2024. GOOG reached $185.58 per share on June 25.

Over the past five years, GOOG has returned more than 240%.

How has the Google stock price performed?

Alphabet stock has performed remarkably well since its founding. It was added to the S&P 500 index in March 2006 and has undergone two splits.

In 2014, the company underwent an unconventional stock split. Its public Class A stock split 2-for-1, creating a new Class C stock with no voting rights.

Class A and Class C shares represent equal ownership stakes in Alphabet. Class A shares with voting rights trade under the ticker GOOGL. Class C shares with no voting rights trade under the ticker GOOG.

The stock has had ups and downs since its 2004 IPO. It fell by more than 50% in 2007 and lost nearly 40% of its value in 2022 before rising to new highs in 2024.

Volatility is not unusual. Even a company like Alphabet can rise and fall. But GOOG’s overall performance has been excellent for investors.

Google earnings

Alphabet’s 2023 earnings were strong, with increases in all the right places. Total revenue was $307.4 billion, compared to $282.8 billion in 2022. That’s a 9% increase year over year.

Operating income was $84.3 billion in 2023, compared to $74.8 billion in 2022. Operating margin was 27%, a slight increase from its 26% margin in 2022.

Net income in 2023 was $73.8 billion, compared to $60 billion in 2022. Earnings per share was $5.80 in 2023, compared to $4.56 in 2022.

Google at a glance

Google began in 1998 as a simple search engine. At the time, it was little more than a search box, a few buttons and links. But its PageRank technology set it apart from competitors like Yahoo.

The company quickly grew. By mid-1999, it had received $25 million in funding and processed 500,000 daily queries.

“To Google” has become a household phrase. The company’s business now includes products and services like YouTube, Android, Google Workspace and Google Cloud. Today, Alphabet is worth over $2 trillion.

Google controversies

Google has faced its share of controversies. In 2015, several academics published a paper that accused Google of manipulating search results. The paper, authored by former Federal Trade Commission advisor Tim Wu, alleged Google was hampering competitors and limiting consumers’ options.

A lawsuit filed in 2020 accused Google of tracking Chrome users’ browsing in private Incognito mode. As part of the settlement, Google said it would delete billions of user records.

In 2023, the Department of Justice accused Google of using its power to stifle competition in search. It said Google was abusing its power to control the search engine business as a monopoly. This resulted in a lower-quality experience for customers, according to the DOJ.

In another lawsuit, the DOJ accused Google of monopolizing online advertising. This trial is set to go before a jury in September.

Google IPO

Google went public in 2004 at $85 per share, valuing the company at $23 billion. The IPO price was expected to be $108 to $135. Given that Google sold 19.6 million shares, an extra $50 on the IPO price would’ve made a big difference.

The company’s offering was a big deal at the time. Investors saw it as one of the hottest tech IPOs since the dot-com era.

But a struggling market and some ill-advised decisions led to mediocre IPO results. For example, Google used a Dutch auction, a decision executives later questioned. Still, the company, now renamed Alphabet, hasn’t looked back since its IPO. Its share price has continued to climb.

Google stock splits

Google went public in 2004 at an IPO price of $85 and has since split its stock twice.

In 2014, the company implemented a 2-for-1 split of its Class A shares as part of its reorganization under Alphabet.

Many people still refer to the stock as Google. But Google is a subsidiary of Alphabet’s publicly traded parent company.

In 2022, Alphabet implemented a 20-for-1 stock split of its Class A and Class C shares. This means one share of Google’s IPO stock now represents 40 shares.

Opportunities and obstacles facing Google

Alphabet is in a strong position with many opportunities ahead. But it also faces challenges.

Cloud computing and online advertising can help the company expand. Google Cloud is one of the fastest-growing parts of the business. The segment was up 28% year over year as of March 31.

Meanwhile, regulatory scrutiny can threaten Google’s business model. Several DOJ lawsuits are still being litigated.

While Google’s cloud computing business is growing, it will continue to face stiff competition. The company’s ability to win customers in this segment will partly determine its success.

Strengths 

• Google’s dominance in search provides a consistent revenue stream from advertising.
• The company continues to invest in growing technologies like cloud computing and AI.
• Alphabet has healthy finances and growing revenue.

Weaknesses

• Antitrust risks and regulatory measures against Big Tech companies create uncertainty.
• Google gets most of its revenue from advertising, and global ad revenue is expected to slow in 2024.
• Google and Meta have lost some of their dominance in online advertising spend to Amazon.

Nasdaq: Google comparison

Alphabet is one of the top stocks in the Nasdaq composite index. As of March 28, 2024, Alphabet Class A (GOOGL) had a weight of 3.35% and Alphabet Class C (GOOG) had a weight of 3.25%.

The table below orders the 10 stocks with the greatest weighting in the Nasdaq by market cap. It’s reordered daily at market close.

Google stock forecast 2024

Analysts expect modest growth in Alphabet’s share price for 2024, projecting full-year earnings per share of $7.56. That’s up slightly from last year’s EPS of $5.80. Analysts forecast full-year revenue of $346.46 billion, compared to $307.39 billion for 2023.

Morningstar analysts believe the company will continue to see growth in search and YouTube users. They also predict 9% ad revenue growth for 2024.

The average price target for GOOG is $192.37. Of 62 analysts, 39 recommend buying the stock, nine rate it as “overweight” and 14 recommend holding it. None recommend selling GOOG.

Google stock forecast 2025

Analysts forecast 2025 revenue of $384.15 billion. If Alphabet maintains its current momentum, estimates like these may rise.

If GOOG grows in line with analyst estimates, it could cross the $200 mark in 2025. This assumes there are no stock splits.

But neither past performance nor analyst predictions guarantee future results. Making accurate long-term predictions about an individual stock's price is extremely difficult.

What can we expect in the coming years?

Alphabet stock has performed exceptionally well over the long term. It may continue to perform well if it maintains its strong financial position. The company should strive to maintain its dominance in online search and advertising markets. Continued growth in its cloud computing business would also bode well for the future. Google also continues to invest heavily in AI. Advancements in AI technology with products like Gemini can enhance its offerings and bolster future growth.

Frequently asked questions (FAQs)

Is Google stock a good buy?

The average price target for GOOG is $192.37. Of the 62 analysts surveyed, 39 recommend buying the stock, nine rate it as “overweight” and 14 recommend holding it.

When did Google stock split?

Google split its stock twice: once on March 27, 2014, and again on July 15, 2022. The 2014 split was a 2-for-1 split, and the 2022 split was a 20-for-1 split.

Does Google stock pay dividends?

Alphabet paid its first dividend on June 17, 2024. It was 20 cents per share for Class A, B and C stock. The company intends to pay quarterly dividends going forward, subject to board approval.