The IT company’s shares rise as it gets ready to reward investors for their strong quarterly performance
When investors reacted to Google’s first dividend announcement and stellar Thursday earnings, the company’s market capitalization reached $2 trillion (£1.6 trillion). Alphabet’s market value surpassed $2 trillion as a result of a 10% increase in the company’s shares during early Wall Street trading on Friday. Alphabet closed over this milestone for the first time on Friday, despite having previously achieved this level in intraday trading in 2021.
Alphabet’s shares climbed following its Thursday results, which surpassed analysts’ forecasts. Microsoft also announced strong figures on the same day, driven by substantial investments in artificial intelligence. As a result, investors propelled Microsoft’s market capitalization beyond $3 trillion at Friday’s market close, a threshold the company had already reached earlier this year.
The rising demand for artificial intelligence models to be trained and operated has helped the cloud segment. Furthermore, the corporation declared its first dividend.
Google’s decision to become a tech business that pays dividends is a reflection of the times, according to Russ Mould, the investment director at the investing platform AJ Bell. He said, “Over the past ten years, big tech firms have grown remarkably.” Even while many are still very innovative, their cash flows are now so strong that, even after reinvesting in the company, they have a sizable amount of money left over, which they can use to reward shareholders.”
Alongside Microsoft ($2.6 trillion), Apple ($2.6 trillion), and Nvidia ($2.75 trillion), the largest chip provider for artificial intelligence technologies, Alphabet is one of three US-listed firms with a combined valuation of over $2 trillion. Last year, Apple also crossed the $3 trillion threshold.