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At Alphabet’s current share price, a stock split is unlikely.
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However, it could be poised for future growth with its investments in AI and other emerging technologies.
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The tech company is going through legal troubles and is reliant on online advertising revenue, which are two reasons it’s trading at a fairly low price.
Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) recently reported impressive quarterly earnings to start 2025. But that hasn’t done much for its share price, which at this writing is down about 18% on the year.
One move that could provide a boost is a stock split. Several major tech companies, Alphabet included, have split their stocks, and some have gone on to market-beating returns. Could Alphabet try this in hopes of better performance? Let’s look at how likely this is and if you should invest in the company regardless.
Companies use stock splits to lower their share prices by issuing more shares. A stock split doesn’t change the underlying value of a company, but it can make the stock more attractive to investors, because shares become cheaper.
Alphabet conducted a 20-for-1 stock split on July 15, 2022, meaning investors received 20 shares for every one share they owned. Before the split, Alphabet was trading at $2,255. Afterward, it traded at a split-adjusted price of about $113, making it a far more budget-friendly investment.
Since then, Alphabet has returned 38%, underperforming the S&P 500 over the same time period. And at the current share price, a stock split doesn’t make much sense. Shares aren’t so expensive that it’s going to drive away investors, which means there’s little benefit to a stock split.
While it’s impossible to predict when companies will split their stock, you probably won’t see Alphabet do so in the near future. But there are plenty of better reasons to consider adding it to your portfolio.
Alphabet is a market leader in several corners of the tech world. Google is by far the most popular search engine, with a market share of nearly 90%, according to StatCounter. Android is the leading mobile operating system, with a 72% market share, and Chrome is the top browser with a 66% market share.
In addition, Alphabet owns YouTube, which was the top media distributor in March. It captured 12% of overall TV viewing, according to Nielsen data, beating Disney+, Netflix, and the other major media companies.
With those products, Google Cloud, and the rest of its services, Alphabet made $90.2 billion in revenue in the first quarter, a 12% increase year over year. What makes the company even more exciting as an investment is its forward-looking approach. Alphabet has consistently invested in emerging technologies. Recently, that has meant a commitment to artificial intelligence (AI) technology, including its Gemini chatbot and its addition of AI Overviews to Google search results.
