Prosperous Individuals Favor This Tech Shares, Yet, Will Its Dominance Persist in 2025?
Interested in potential investment opportunities? Keep an eye on the holdings of prominent billionaire hedge fund managers. Billionaires like Bill Ackman, Chase Coleman, and Chris Hohn, collectively worth an estimated $25 billion, are worth monitoring. These titans of finance share a common love for one tech giant: Alphabet.
2022 was a challenging year for Alphabet, with its shares dropping 39% due to weakening digital advertising market conditions and recession fears sparked by the Federal Reserve's decision to hike interest rates aggressively. However, 2023 and the first nine months of 2024 have seen a remarkable comeback, with Alphabet's stock up 115% since the start of the year.
Alphabet's revenue grew 9% YoY in 2023, and 15% through the first nine months of 2024, thanks to a resilient digital advertising industry and the emergence of AI capabilities in the company's products and services. The bottom line also received a boost, with Q3 2024 sales turning into 32% operating income, thanks to cost cuts and streamlined operations.
Despite the stock's price-to-earnings (P/E) ratio increasing by 44% during this time, shares are still affordable at a P/E of 25.2, on par with the S&P 500's ratio and making Alphabet the cheapest stock in its peer group.
Despite the stock's impressive run-up, Ackman, Coleman, and Hohn remain Alphabet shareholders, and there are compelling reasons for new investors to buy shares. Wall Street consensus analyst estimates project a 11% YoY revenue growth and a 13% compound annual growth rate for Alphabet's EPS between 2024 and 2026.
Alphabet's growth is driven by AI and cloud computing initiatives, digital advertising, regulatory management, capital efficiency, and innovation, giving the company a unique position in the market. The company aims to expand its revenue streams through AI infrastructure, maintain double-digit growth in its core ad business, and navigate regulatory risks effectively.
In conclusion, Alphabet's strategic initiatives, robust core business, and ability to manage regulatory risks position the company for continued growth and profitability between 2024 and 2026, making it an attractive investment for forward-thinking investors.
- With Alphabet's stock prices still affordable at a P/E ratio of 25.2, definitely, investors looking for opportunities in 2024 should consider this tech giant as a potential investment.
- Prominent billionaire investors like Bill Ackman, Chase Coleman, and Chris Hohn, who collectively have a net worth of $25 billion, continue to hold onto their Alphabet shares, showing their confidence in the company's future financial performance.
- Given the tiger-like comeback Alphabet has seen since 2023, with its stock up 115% since the beginning of the year, investing in this tech giant could yield significant returns for new investors in 2024.
- Wall Street analysts anticipate that Alphabet will continue to thrive in the coming years, projecting a 11% year-over-year revenue growth and a 13% compound annual growth rate for its EPS between 2024 and 2026, making it an appealing option for investors seeking long-term financial gains.
