This tech behemoth is forecasted to grow at an annual rate of 18.76% over the next five years.
Alphabet Inc. (GOOGL)
From Dow Theory Forecasts
Alphabet has been on the Focus List for 52 months, more than twice the tenure of the next longest holding, Microsoft (MSFT). During that time, the shares have more than doubled, reflecting consistent sales and profit growth.
We don’t expect the move away from traditional advertising toward digital to reverse, and YouTube—Alphabet’s most profitable advertising market—continues to gain popularity with younger audiences. Demand for cloud services is also on the rise.
Much has been made of the company’s “moon shots,” massive investments in unproven businesses such as autonomous cars and drone delivery. So far, none of these has paid off. However, the core business continues to do the heavy lifting, and if one of those special projects blossoms into a big winner, so much the better.
After a profit decline this year, analysts target a return to roughly 20% growth in 2021 and 2022.
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, December 21, 2020