Alphabet is the parent company of Google, Waymo, and several other businesses. Google is focused on Internet services, while Waymo is focused on self-driving. The company launched an autonomous taxi service called Waymo One. When investors are interested in Alphabet stock, they have multiple options.
Alphabet has two classes of shares trading under ticker symbols "GOOGL" and "GOOG" on the Nasdaq exchange. Which Alphabet stock should you buy? It helps to understand the difference between Alphabet’s share classes.
Five years ago today, we completed the world’s first fully driverless ride on public roads. Since then, we've taken a responsible, safe approach, and now public #WaymoOne riders are experiencing the magic of the #WaymoDriver in their everyday lives. 🥳🤖🚗 pic.twitter.com/JMPlVn56LO— Waymo (@Waymo) October 20, 2020
What’s the difference between Alphabet’s GOOGL and GOOG stocks?
The GOOGL stock symbol represents Alphabet’s class A shares, while the GOOG stock symbol represents Alphabet’s class C shares. The main difference between GOOGL and GOOG shares is voting rights. GOOGL shareholders have voting rights at one-share-one-vote, while GOOG shareholders don't have any voting rights.
GOOGL shareholders can participate in decision-making at Alphabet’s annual general meeting like the election of board members, while GOOG shareholders can't participate. The other difference between Alphabet’s class A and class C shares is that the GOOG stock price sometimes trades at a discount to GOOGL stock.
What kinds of Alphabet shares can investors choose from?
In addition to class A and class C shares, Alphabet has class B shares, which is a special share class. Alphabet’s class B shares aren’t publicly traded. Therefore, those looking to invest in Alphabet stock can only choose from class A or class C share types.
The class B shares are held by Alphabet founders and insiders. Alphabet’s class B shares have 10 times the voting power of class A shares. The class B shares were created to preserve the control of Alphabet/Google founders.
When was Alphabet founded?
Alphabet was created in October 2015 to act as the holding company of Google and its other businesses. Google founders Larry Page and Sergey Brin wanted a corporate structure that would separate the more established Google business from the more speculative projects, while still keeping everything under the same roof.
Will Alphabet stock split?
With both GOOGL and GOOG stocks trading above $1,500, many investors have wondered whether Alphabet will split its stock. Companies split their stocks to make them more liquid and accessible to small investors. Will Alphabet stock split?
There are some examples that Alphabet could follow. Apple and Tesla implemented stock splits in August 2020 after their stock prices surged and were too expensive for many investors. Apple implemented a 4-for-1 stock split that lowered the price of Apple shares to $125 per share from $500 previously.
Tim told me that he wanted to give smaller shareholders a chance to buy stock, hence the split. The other companies care too much big shareholders or being like Warren Buffett. It's a small but welcome sign...— Jim Cramer (@jimcramer) July 30, 2020
Even without a stock split, investors have other alternatives to buy shares at an affordable price. For example, investors who don't want to spend more than $1,500 on a single share can purchase fractional shares of Alphabet stock through online brokers like Robinhood, SoFi Invest, and Charles Schwab.
Should you buy Alphabet stock?
Like many technology companies, Alphabet doesn’t pay a dividend right now. While dividend-seeking investors may not find Alphabet stock ideal, the stock will appeal to growth investors. Advertising dollars are shifting more to online and Alphabet’s Google dominates the online advertising space.
Investors seeking exposure to the rapidly growing cloud computing market may find Alphabet to be a great fit for their portfolio. Alphabet’s Google is among the world’s top cloud companies. Beyond online advertising and cloud computing, Alphabet stock also gives investors exposure to promising industries like self-driving, ride-hailing, and smart home technology.