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Alphabet (GOOGL) stock heads lower on near-term concerns

Alphabet Inc. (NASDAQ: GOOGL) stock has fallen over 4% on Wednesday despite disclosing YouTube and Cloud segments separately for the first time. The stock, which reached a record high of $1,500.58 on January 23, has opened higher on Thursday but changed course to the negative territory on near-term concerns including costs related to the investments.

The shares have risen over 6% in the past month and over 12% in the past three months. In the long term, investors were positive about the company’s future that was reflected in the stock, which has grown over 26% in the past year and over 170% in the past five years. The shares, which are trading over $1,435, are above the 50-day and 200-day moving average of $1,410.86 and $1,280.44, respectively.

Google search screenshot. Courtesy: Christian Wiediger on Unsplash

The parent of search engine giant Google reported weaker-than-expected revenue for the fourth quarter while the bottom line came above consensus. The Cloud and YouTube continue to dominate in the fourth quarter. The company continues to invest in deep computer science and technology that includes wider adoption and application of artificial intelligence, ambient computing and the move to the cloud.

Alphabet continues to utilize the exciting area shopping and commerce and this can be evidenced by the number of daily shoppers visiting over the Black Friday and Cyber Monday holiday weekend. The company expanded the product selection on Google due to a 4-times uptick in the US merchants participating in shopping action programs throughout the holiday season.

The company has taken a drastic step to remove misleading information about the upcoming 2020 elections by applying deceptive content policies. Alphabet has been investing meaningfully to grow its YouTube subscriptions that have higher content acquisition cost ratios.

Read: Twitter Q4 earnings preview

The pending acquisition of Fitbit would give Alphabet a foundation in wearables. The Home devices, which include new Nest Mini and Nest Hub Max, have been selling well over the holidays. The ongoing momentum in mobile and desktop have been driving the Google search and other advertising revenues for the fourth quarter.

For the fourth quarter, Alphabet reported a 19% growth in the bottom line driven by higher top-line. Google Search continued to dominate the search engine market in the past five years with the aid of artificial intelligence. As of December 31, 2019, the company had long-term debt of $4.55 billion while cash, cash equivalents, and marketable securities stood at $119.7 billion.

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