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Alphabet Joins $3 Trillion Club Following Favorable Court Ruling
On September 15, 2023, Alphabet (NASDAQ: GOOG, GOOGL) became the latest company to reach a $3 trillion market cap, buoyed by a lenient court ruling regarding its search advertising practices. The ruling negated harsher remedies that could have included divestitures, allowing Alphabet to maintain its significant contracts, including a $20 billion annual arrangement with Apple.
Alphabet’s stock performance has been significantly impacted by the court’s decisions amidst increasing competition from AI alternatives like ChatGPT. Despite these concerns, Alphabet’s search revenue grew by 12% year-over-year last quarter, and its cloud computing business has reached a run rate of over $50 billion, with an operating margin of 21%.
Financial analysts speculate that Alphabet could surpass a $4 trillion market cap if its price-to-earnings multiple expands, projecting that a modest increase in earnings multiples could elevate its market valuation significantly by the end of next year.
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