Sundar Pichai, CEO of Alphabet Inc.
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Alphabet stock rose to an all-time high on Thursday, joining Microsoft and Meta, which have been climbing since hitting new highs earlier this month.
Alphabet stock rose 2.1% to close at $151.87. Microsoft rose 0.6% to $404.87 and closed with a market capitalization of more than $3 trillion. Meta rose 0.6% to $393.18. Apple is still slightly below its December high.
The gains come ahead of the mega-tech companies' quarterly earnings reports next week. Investors are optimistic that a boom in artificial intelligence, cost-cutting measures, broad-based economic growth, easing inflation and the prospect of lower interest rates will allow companies to continue posting impressive results.
Analysts at Mizuho Securities maintained a buy rating on Alphabet this week in a note to investors, citing its “strong position in the search and advertising markets and sustained history of investing in innovation and AI.”
Alphabet is expected to report 12% revenue growth in the quarter, which would be the fastest growth rate since mid-2022, according to analysts surveyed by LSEG.
Alphabet stock rose 58% last year and is currently up 8.7% heading into early 2024. Meta was the second-best performer on the S&P 500 last year, nearly doubling its value to only trailing Nvidia. The stock rose 11% in January. Microsoft mimicked Alphabet's rise last year and is up nearly 8% so far this year.
Microsoft leads Alphabet in the cloud computing market, but it still lags behind Amazon Web Services. In a note Wednesday, Piper Sandler analysts urged investors not to “sleep on the Microsoft Cloud,” even though the company's AI efforts have garnered the most attention.
“While we are excited about the promise of Microsoft's AI first-mover advantage, we acknowledge that this is still small at 1% of revenue and see cloud as the fundamental demand engine that will accelerate growth.” analysts wrote, recommending the stock to buy.
Microsoft has overtaken Apple to become the world's most valuable publicly traded company.
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