Google Building

Google Market Value at $2.2 Trillion After Dividend Payout

Alphabet, Google’s parent company, saw an increase in its share price of over 12% just before the market closed on Thursday, 26th April. It indicates a rise of $200 billion in market capitalization once the market opens the following Friday. It could raise the value of the Google market cap to $2.2 trillion.

This comes after Alphabet announced its first dividend as a bonus for good Q1 earnings. Their revenue was around $80.5 billion, and above analysts’ predictions of $78.8 billion, according to Forbes. Their earnings per share were around $1.89. Net income rose by almost 64% since last quarter, to $23.6 billion.

Google Market Cap over the past year until 4th Aril 2024: From Macrotrends

As a result, Google announced its first-ever dividend, skyrocketing share prices. Google making this decision only now indicates the company’s stature on the stock market- high-value payouts aren’t always needed to sustain its trading. The dividend value is around 20 cents per share every quarter, with a value of $175 during the announcement. That makes a 0.5% dividend yield and a modest payout of $2.5 billion.

The earning increase may have partly come from the recent layoff of Google employees- around 10,000 in the past year.

Google’s AI Investment

Alphabet executives attribute the recent successes to their increased investment in AI technology. This includes optimizing Google services using AI, as well as a suite of standalone AI services and chatbots, such as Gemini.

Other high-valued companies have also benefitted from AI expansion. Microsoft, who recently overtook Apple as the world’s most valuable listed company valued at $3.04 trillion, are large investors in OpenAI and has been developing AI services of its own, such as CoPilot. 

Microsoft themselves also saw a modest $6.4 billion increase in profit and a $9.1 billion dividend payout in Q1.

Wallpaper Microsoft Logo: From X

The only other companies valued above $2 trillion are Nvidia and Apple. Read about Nvidia’s recent success in one of our tech summaries. The Alphabet conglomerate appears to be following in the footsteps of Microsoft.

It can be argued that AI expansion does not always generate profits, however. Facebook’s parent company Meta saw its stock plunge and CEO Mark Zuckerberg’s wealth to drop by $17 billion. 

Many investors pulled out after Meta’s Q1 announcement to invest billions billions into AI. Meta was recently seeing success as Mark Zuckerberg recently overtook Elon Musk in net worth, so this is surprising.

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Cover Image- The New York Times