Nervous investors selling Nasdaq stocks also indiscriminately reduced their Alphabet (NASDAQ:GOOG, GOOGL) holding. This could be a mistake. GOOG stock broke below its key 50-day moving average on light selling volume.
Active investors are speculating on Alphabet’s stock price volatility instead of appreciating its business growth. Moreover, an upcoming stock split in July will attract more retailers to buy shares. The search engine giant is not only embracing Web3. They’re also exploring augmented reality (AR). On its quarterly conference call, Chief Executive Officer Sundar Pichai said that AR is a big opportunity at the computing layer. The company invested in that space and will continue to play a role.
Google believes Web3 is powerful technology with broad application opportunities. Its Cloud team is assessing how it may support its customer’s needs using the emerging tech. They will need help building, transacting, storing and deploying new products on a blockchain-based platform.
To support this opportunity, Google added nearly 6,500 staff. In particular, it is allocating resources to grow Google Cloud and Google Services. The company is positioned to scale those businesses and exceed investor expectations. The tough competition in hiring talented staff shows no sign of easing.
To expand its business beyond search engine and advertising, Alphabet launched Alphabet Wing last week. The drone delivery sub-unit launched its first commercial service without much fanfare. Expect more retailers to adopt drone delivery services. As the business grows, Alphabet will prove that it is not a one-trick pony with online ads. Still, Wing will not add meaningfully to results for a long time. The subsidiary must improve on the services before a wide-scale deployment.
Google is becoming a diversified technology giant that investors should consider. It trades at a modest valuation with a price-to-earnings ratio of only 25 times. Its FAANGM peers trade at considerably higher prices. Investors seeking a safe growth stock should accumulate GOOG stock. Ahead of the stock split in a few months, investors should take another look at the company amid panicking speculators selling shares.
On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.