Alphabet (GOOGL) Rides on Solid Momentum in Google Services
Alphabet’s GOOGL shares have rallied 26% in the year-to-date period, outperforming the Zacks Computer & Technology sector’s growth of 15.7%. The company is benefiting from strong momentum in Google Services segment on the back of search, YouTube and Android. Hence, Alphabet’s Google is constantly making efforts to bolster the segment further.
In this regard, Google’s latest roll-out of “Minimized Custom Tabs” for Google Chrome on Android remains noteworthy.
These tabs shrink webpages into Picture-in-Picture windows featuring site favicon, page name and domain, enabling multitasking and seamless transition between native apps and web content.
The custom tabs are expected to improve the user experience and functionality of the Chrome browser, which, in turn, will likely increase the company's web browsing traffic.
Moreover, Alphabet is expected to gain solid traction among Android users on the back of its latest move.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Other Google Services Efforts to Note
Alphabet added generative AI features, namely “Tab Organizer” and a theme maker, to Chrome 121. The Tab Organizer feature automatically creates tab groups based on open tabs by tapping the downward-facing icon in the top-left corner on Windows. The theme maker feature allows users to create custom themes in Chrome using a generative AI text-to-image diffusion model, offering six suggested options and recent creations.
The company added a Gemini shortcut in Google Chrome’s address bar, allowing faster search through bookmarks, history and tabs.
Alphabet also introduced an Incognito mode in Google Chrome, which allows users to browse the web without any trace, removing browsing history and tracking data after closing the browser, a feature that some interpret as private browsing.
Google is developing a built-in "Listen to this page" text-to-speech capability for Chrome on Android. The users will get a new "Listen to this page" option, which will open on Android’s three-dot overflow menu, launching a mini-player with a circular play/pause button, page title, site name, progress bar and close button.
Wrapping Up
Per a Dataintelo report, the global search engine market size is expected to reach $507.4 billion by 2032, indicating a CAGR of 11% between 2024 and 2032.
Growing Chrome capabilities will continue to aid Google in strengthening its foothold in the global search engine market.
A report from GlobalStats states that Google continued to enjoy its dominant position in the global search engine market, with a market share of 91.5% in 2023.
Strength in Google’s search business will continue to drive growth in the Google Services segment.
In the first quarter of 2024, the Google Services segment increased 13.6% year over year to $70.4 billion, which accounted for 87.4% of the total revenues.
The strengthening Google Services segment is expected to aid Alphabet’s overall financial performance in the near term.
The Zacks Consensus Estimate for 2024 total revenues stands at $295.53 billion, indicating year-over-year growth of 15.2%.
The consensus mark for 2024 earnings is pegged at $7.61 per share, indicating a 31.2% rise from the year-ago figure. The figure has been revised upward by 0.5% in the past 30 days.
Zacks Rank & Other Stocks to Consider
Currently, Alphabet sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader technology sector are Arista Networks ANET, Badger Meter BMI and Dropbox DBX, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 30.6% in the year-to-date period. The long-term earnings growth rate for ANET is 15.68%.
Badger Meter’s shares have gained 27% in the year-to-date period. The long-term earnings growth rate for BMI is currently projected at 15.57%.
Shares of Dropbox have declined 22.6% in the year-to-date period. The long-term earnings growth rate for DBX is 11.44%
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