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Google shares remain in a bull market supported by Q3 results

  • Google reported a larger than expected profit and a 14% Y/Y increase in revenues for Q3
  • As long the price is above $1500 this stock remains in the “buy” zone
  • Google will offer its users to open a bank account through Google Pay

Alphabet Inc (Google) shares have advanced from $1515 above $1800 in less than three weeks and the current price stands around $1742. Google has found strong support above $1500 and the pandemic has only solidified the position of this company further.

Fundamental analysis: Google has increased revenues and profit in Q3

Google, LLC specializes in internet-related services and it is considered one of the Big Five technology companies in the U.S. Even in this pandemic environment, the business of the company is going well and the price of the stock is near record levels.


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Google reported a larger than expected Q3 adjusted profit and a 14% Y/Y increase in revenues. The revenue of the company has increased to $46.17B in Q3 while Q3 GAAP EPS was $16.40 (beats by $5.19) which is very good.

According to the latest news, Google will offer its users to open a bank account through Google Pay in order to take a share in territory currently occupied by banks and apps. Google has already partnered with Citi (NYSE: C) and Stanford Federal Credit Union on providing mobile bank accounts and the company will continue to offer peer-to-peer payments.

Mastercard is also extending the Google Pay service as the contactless transactions have jumped above 78% across Europe.

“Delivering choice and innovation in payments is an important part of how we improve people’s everyday life. With hygiene becoming a high priority for many people, we are delighted to join forces with Google to provide the people we serve some ease, speed and peace of mind,” said Milán Gauder, executive vice president of product and innovation, Europe at Mastercard.

Some analysts say that Google is still undervalued relative to the market and stabilizing the economy will accelerate the company’s growth. I can agree that Google is less overvalued than the entire technology sector but with a $1.18T market capitalization, this stock is expensive.

The main drivers of Google’s recent capitalization growth are mainly external and there are some obvious risks when it comes to trading this stock currently. Technology stocks are trading at an all-time high and it is important to mention that Softbank Group has slashed its exposure to Google stocks.

The correction of the US stock market could be around the corner but as long the price is above $1500, Google shares remain in a “bull” market.

Technical analysis: The price of the stock is trading near record levels

Google’s valuation is currently near all time high but as long the price is above $1500 this stock remains in the “buy” zone.

Data source: tradingview.com

The current support levels are $1700, $1600 and $1500, $1800 and $1900 represent the resistance levels. If the price jumps again above $1800 resistance the next target could be located at $1850 but if the price falls below $1500 it would be a strong “sell” signal and maybe a sign of the trend reversal.

Summary

Google has found strong support above $1500 and the pandemic has only solidified the position of this company further. The revenue of the company has increased to $46.17B in Q3 while Q3 GAAP EPS was $16.40 (beats by $5.19) which is very good. Some analysts say that Google is still undervalued relative to the market but with a $1.18T market capitalization, this stock is expensive in my opinion. There are some obvious risks when it comes to trading this stock currently but as long the price is above $1500, Google shares remain in a “bull” market.

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