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Alphabet Inc (GOOGL) Couldn’t Sink Itself if It Tried

President Dwight Eisenhower once remarked, “Accomplishment will prove to be a journey, not a destination.” President Donald Trump, before he took office, stated emphatically, “I could stand in the middle of 5th Avenue and shoot somebody and I wouldn’t lose voters.” Such timeless words have never been more appropriate for Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL).

Alphabet has proven, perhaps more than any other company in the world, that accomplishment is indeed a journey. A cursory look at GOOGL stock will settle the deal for most folks. Beyond that, InvestorPlace contributor Dana Blankenhorn hit the nail on the head when he discussed Alphabet Inc’s success. They kept it simple, and “focused on what computers do.”

On the flip side, Yahoo! Inc. (NASDAQ:YHOO) did not take that advice to heart. Frankly, the results speak for themselves. Although YHOO’s lifetime returns are 3,400%, when you compare it to its internet-bubble peak, shares are down 55%. Comparatively, GOOGL stock is up over 1,500% lifetime — and it keeps going and going and going.

Yahoo’s success was a destination; Alphabet Inc is on a journey.

Unfortunately for any would-be rivals, that journey may never end. Even if Alphabet committed the equivalent of shooting someone on 5th Avenue, people would still buy GOOGL stock.

As Blankenhorn beautifully states, “You don’t talk to GOOGL before buying their search service, you just type (or talk). You don’t talk to Alphabet before buying their advertising, you just buy it online. Clouds scale to infinity and beyond, and with its niche secure, the company is a money-making machine you can’t turn off.”

It’s All About the Search Engine

Of course, no company is without criticism. For mighty Alphabet, analysts have questioned its leverage towards its search engine and advertisement business. InvestorPlace’s Chris Lau argues that excessive advertisements could water down its users’ search engine experience. In theory, Microsoft Corporation (NASDAQ:MSFT), via its search engine Bing, would benefit, putting direct pressure on GOOGL stock.

Alphabet Inc is well aware of the concerns, and are actively addressing them. The company’s ever-popular Gmail service now offers the ability to send money to other users. Again, in theory, this action competes against firms like PayPal Holdings Inc (NASDAQ:PYPL).

GOOGL also throws its weight around in the smart devices sector. If it weren’t for internal controls, Alphabet would be a madhouse, a chaotic mixture of both the practical and speculative.

But to Blankenhorn’s original point, if the internet giant engages in extracurricular activities, then it risks becoming another Yahoo. While the endeavors may justify a product engineer’s job, the reality is simple. The only thing that can upend GOOGL stock is if Alphabet management abandons its core market.

Even then, that’s a stretch. To paraphrase former California Governor Schwarzenegger, GOOGL “cannot self-terminate.”

GOOGL Stock Is Bulletproof

In prior articles, I mentioned Alphabet’s incredible advantage over its search engine rivals. I wish to further reiterate this point with astounding new data.

GOOGL stock, search engines
Click to Enlarge
Source: Source: JYE Financial, unless otherwise indicated

Let these numbers sink in for a second.

Consider the around-the-clock competition that GOOGL attracted since the start of the decade. Don’t just think myopically, either. Global brands like Baidu Inc (ADR) (NASDAQ:BIDU) are especially eager to crack a few heads. Yet with all that time, Alphabet’s would-be rivals haven’t done jack.

If they did do jack, we would notice the efforts. In the search engine space, GOOGL stock is waist-deep in a mature market. Typically, this is a ripe period for fresh blood to swoop in. But the hubris of Alphabet is that they deny any and all swooping, including from themselves.

In all these years, all other search engines combined could only take a lousy 2% from GOOGL. This metric, above all else, proves how utterly impossible it is to challenge Alphabet Inc’s Death Star. So investors can rest easy. GOOGL stock couldn’t be Yahoo if it tried.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.  


Article printed from InvestorPlace Media, https://investorplace.com/2017/04/alphabet-inc-googl-stock-cant-sink/.

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