Alphabet Inc on Thursday hit a milestone as a rally in its shares took it above a US$1 trillion valuation for the first time, solidifying the dominance of technology and Internet shares as the biggest titans of Wall Street.
The shares rallied in the last half an hour of trading to close at US$1,450.16, up 0.8 percent on the day.
AN EXCLUSIVE GROUP
With the gain, Alphabet became the newest member of an elite club to trade with a 13-digit market capitalization. Only two other US companies are past that threshold: Apple Inc, valued at about US$1.38 trillion, and Microsoft Corp, at US$1.27 trillion.
Globally, the list is topped by Saudi Aramco, Saudi Arabia’s national oil company, which went public last month and has a market capitalization of about US$1.8 trillion.
Amazon.com Inc flirted with the level last year, but shares in the e-commerce company would have to rise more than 7 percent for its valuation of US$931.1 billion to return above US$1 trillion.
The four companies are by far the largest on Wall Street and that gives them an outsized impact on overall market direction. Together, they represent more than 15 percent of the S&P 500.
The rest of the market is, at best, hundreds of billions of US dollars away from their valuations.
The fifth-largest US company by market capitalization, Facebook Inc, has a valuation of US$632.9 billion. The biggest company outside the technology or Internet sectors is Berkshire Hathaway Inc in sixth place, valued at about US$559 billion.
Alphabet’s move above the level is just the latest step higher for the Google parent company. Its shares are up about 40 percent from a low in June Last year, with the rally largely fueled by optimism over its prospects this year, particularly with respect to ad revenue.
Alphabet is to report its fourth-quarter results for last year on Feb. 3.
LOFTY GOALS
Evercore ISI has raised its price target for the shares to US$1,600 from US$1,350, saying that it expects the company to continue “to compound on its defensible dominance in search and video advertising with YouTube.”
Earlier this week, Deutsche Bank raised its own target to a Wall Street-high of US$1,735, saying that the shares trade “too cheaply.”
The bank cited more ad product launches, an expanded share buyback program and “improving competitiveness in the cloud business.”
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