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Photograph by Gabriel Bouys / AFP / Getty Images
Alphabet
According to Baird Equity Research, the cloud computing business is not getting the respect it deserves.
The story back. The actions in alphabet (symbol: GOOGL) have increased by about 18% this year. In July, the company reported quarterly results above expectations, with sales growth accelerating compared with the previous quarter. Alphabet also announced a share buyback authorization of an additional $ 25 billion at the time.
What's up. Colin Sebastian, an analyst at Baird, confirmed Friday its Outperform rating for the Alphabet title.
"We do not think Google Cloud valuation is fully integrated with Alphabet actions," he wrote. "The contacts in the chain suggest that GCP [Google Cloud Platform] gaining ground in cloud services, benefiting from trends such as multi / hybrid cloud and devops [software development practices]. "
Alphabet shares fell 0.7% to $ 1,229.84 on Friday.
The analyst said Google's artificial intelligence and machine learning capabilities attracted developers to its cloud platform. He predicts that GCP and cloud services (G-Suite) will generate $ 11 billion in revenue next year, an estimated $ 100 billion valuation, according to his analysis.
Look forward. Sebastian increased his Alphabet price goal from $ 1,360 to $ 1,400.
Write to Tae Kim at [email protected]
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