If You Invested $1000 in Alphabet 10 Years Ago, This Is How Much You'd Have Now

For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Alphabet (GOOGL) ten years ago? It may not have been easy to hold on to GOOGL for all that time, but if you did, how much would your investment be worth today?

Alphabet's Business In-Depth

With that in mind, let's take a look at Alphabet's main business drivers.

Alphabet is one of the most innovative companies in the modern technological age. Over the last few years, the company has evolved from primarily being a search-engine provider to cloud computing, ad-based video and music streaming, autonomous vehicles, healthcare providers and others.

In the online search arena, Google is a monopoly with more than 94% of the online search volume and market. Over the years, the company has witnessed increase in search queries, resulting from ongoing growth in user adoption and usage, primarily on mobile devices, continued growth in advertiser activity, and improvements in ad formats.

The company is gaining market share in the cloud-computing, driven by continued strength in Google Cloud Platform and Google Workspace.

Alphabet also enjoys a dominant position in the autonomous vehicles market, thanks to Waymo’s relentless efforts. Also, it has bolstered its footprint in the healthcare industry with its life science divison, Verily.

The company has also become a renowned name in the world of entertainment. YouTube came up with $20 billion advertising revenues in 2020.

Total revenues were $182.5 billion in 2020. The company reports revenues under three broad heads, Google Services, Google Coud and Other Bets, which generated 92%, 7% and 3% of total revenues, respectively.

The Google Services includes products and services such as ads, Android, Chrome, hardware, Google Maps, Google Play, Search, and YouTube.

Google Cloud includes Google’s infrastructure and data analytics platforms, collaboration tools, and other services for enterprise customers.

Other Bets is a combination of multiple operating segments that are not individually material.

Alphabet has many competitors in the form of internet pioneers, streaming platforms, technology giants, cloud computing and customer relationship companies.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Alphabet ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in August 2011 would be worth $9,024.40, or a gain of 802.44%, as of August 4, 2021, and this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 250.95% and gold's return of 5.51% over the same time frame.

Going forward, analysts are expecting more upside for GOOGL.

Alphabet reported strong second quarter results wherein both earnings and revenues grew year over year. Solid momentum across search, advertising, cloud and YouTube businesses aided the results. Further, growing proliferation of consumer online activities and rising advertiser spending remained tailwinds. Notably, the stock has outperformed its industry on a year-to-date basis. Alphabet's robust cloud division continues to be the key catalyst. Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results. Moreover, Google’s mobile search is constantly gaining solid traction. Also, strong focus on AI innovation and home automation space should aid business growth in the long term. However, its growing litigation issues remain concerns.

Over the past four weeks, shares have rallied 7.48%, and there have been 13 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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