Alphabet’s stock has declined only slightly in the last one month
In this series, we’ll discuss the performance of Alphabet (GOOG) stock and the company’s main growth driver—mobile search.
Alphabet is one of the main companies in the technology sector that has withstood the recent tech sell-off. The chart below shows that Alphabet lost only 4.5% of its stock value in the last one month. Amazon (AMZN) and Netflix (NFLX) lost 15%–20% of their stock values during the same time period. The only exception was Facebook (FB), which rose about 4% during the same period.
Alphabet provided better-than-expected results despite currency headwinds
The primary reasons for the recent tech sell-off were the uncertain global economic environment and the strong US dollar (UUP). Due to the uncertain economic environment, many companies announced below par revenue and profit outlook for 2016. The US dollar strengthened by 12% in 4Q15 on a trade-weighted basis versus other currencies, according to the Wall Street Journal.
Alphabet, in particular, realized a negative impact on its revenues of $1.3 billion, or $1 billion after accounting for hedging benefits, in the last quarter. Despite these issues, Alphabet’s revenues in 4Q15 were $21.3 billion, a growth of 18% year-over-year (or YoY) and 14% sequentially. This growth is even more impressive if we remove currency effects, as its revenues grew by 24% on a YoY basis.