How To Buy Google/Alphabet (GOOGL) Stocks & Shares – Forbes Advisor Australia
Google’s parent company Alphabet reported earnings of $69.7 billion for the second quarter, up 13% from the same period last year and $2 billion more than the first quarter. However, earnings for the second quarter were $16 billion compared to $18.5 billion in the second quarter of 2022. The next earnings report is due in late October.
Alphabet and Google CEO Sundar Pichai said the decline in reported earnings could be attributed to increased investment in its “deep” technical capabilities: “In the second quarter, our performance was driven by search and cloud. The investments we’ve made in AI and computing over the years help make our services exceptionally valuable to consumers and extremely effective for businesses of all sizes.
“As we sharpen our focus, we will continue to invest responsibly in deep computer science over the long term.”
Ruth Porat, the company’s Chief Financial Officer, said the company will continue to pursue a growth-focused strategy: “Our consistent investments to support long-term growth are reflected in our solid second quarter performance of $69.7 billion in revenue quarter, up 13% year-on-year or 16% on a constant currency basis.
“We are focused on responsible capital allocation to support our growth opportunities.”
Alphabet’s shares are up nearly 5% to over $110 in after-hours trading on the NASDAQ, the tech-dominated U.S. stock index.
On July 15, 2022, the Company executed a 20:1 stock split effective July 1, 2022.
Update July 7, 2022: Alphabet plans 20-for-1 stock split after shareholders give green light
Following shareholder approval at its annual general meeting in June, Alphabet — the parent company of the Google brand — is planning a 20-for-1 stock split after trading on Friday, July 15, 2022.
From that date, each shareholder will own 20 shares for every single share they held in the NASDAQ-listed company prior to the split.
Alphabet has increased in value nearly 40 times since the company went public in 2004, and is splitting its stock to make its shares more accessible/affordable to retail investors — a key source of capital.
Alphabet shares closed at $2,291 on Wednesday July 6, 2022. If they stayed the same price through next Friday’s close, each of the new shares would be worth just over $114.
Although each share is worth less after a split, investors don’t lose out because their total holdings are worth the same as they were before the move.
Bank of America research suggests that stock splits have historically been positive for companies that complete them, as they tend to outperform the broader market in the 12 months following a split.
Update April 27, 2022: Google’s parent company Alphabet sees price losses after the first quarter report
April 27: Shares of Alphabet, Google’s parent company, fell yesterday in April after the giant tech company reported weaker-than-expected first-quarter earnings and revenue.
Alphabet’s first-quarter earnings slumped $1.5 billion compared to 2021, as weak results from the company’s YouTube unit highlighted slowing momentum in online advertising.
Alphabet reported a 23% increase in revenue to $68 billion in the three months ended March this year, slightly below forecasts. This compares to a 34% increase in revenue over the same period in 2021.
Alphabet’s stock price is down about 20% since the beginning of this year. Rising inflation, ongoing post-pandemic supply chain disruption and conflict in Ukraine are forcing advertisers to review their spending plans.
In addition to Google, the Californian alphabet owns the Android smartphone operating system along with the video platform YouTube. The company makes more money from digital advertising than any other company.
Ruth Porat, Alphabet and Google’s chief financial officer, said, “We are pleased with the 23% year-over-year revenue growth in the first quarter. We continue to make judicious investments in capital, R&D and talent to support long-term value creation for all stakeholders.”
Why own stocks?
Before you buy stock in a company, ask yourself why you are making the decision. Does the company have great future prospects with a stock price that could go from strength to strength? Or are takeover talks pending that could drive up a company’s share price?
Perhaps the company you have identified is on a recovery mission and its share price is beginning to recover from previous lows.
How to buy Google stock
Once you are sure of the reasons for buying stock in a particular company like Google, there are several steps you need to take.
1) Open an account
Whether you’re a seasoned stock trader or someone brand new to stock market investing, if you want to buy Alphabet stock, you’ll need to open an account with a regulated broker.
Stock brokerage is a highly competitive marketplace, and do-it-yourself investor services come in many forms – from online investment platforms operated by some of the biggest names in financial services to investment trading apps operated by your smartphone or tablet work.
Before opening an account, note the following:
- Keep track of your ultimate financial goals
- Be prepared to weather the ups and downs of the stock market
- Try to keep trading costs to a minimum
- Keep in mind that stock investments can lead to tax charges, e.g. B. CGT if you sell part of your portfolio.
And before you buy any stocks, ask yourself these questions:
- Should I seek financial advice?
- Do I agree to the risk level in question?
- What is my investment budget?
- Can I afford to lose money?
- Do I understand the company I want to invest in?
- Am I protected if my platform provider/consultant goes out of business?
2) Find out where Alphabet is traded in Australia
Alphabet’s ticker symbol is GOOGL and the company is traded on the Nasdaq in the US. In Australia, the Nasdaq market opens between 11:30 p.m. and 1:30 a.m. AEST, depending on Daylight Saving Time.
You should be able to buy US stocks through most brokerage accounts. A currency exchange fee (typically around 1%) will apply to the purchase of Shares in US dollars unless you fund the purchase from a US dollar account.
Most brokers also charge a slightly higher transaction fee for buying US stocks than for local stocks on the ASX; However, it is worth comparing the fees of different brokers if you plan to trade US stocks on a regular basis.
You will be asked to complete a W-8BEN form (valid for three years) that will allow you to benefit from a reduction in withholding tax on qualifying US dividends and interest from 30% to 15%. Holding US stocks also exposes you to exchange rate risk based on how the Australian dollar performs against the USD.
Since Australia and the US have a double tax treaty, all dividends from US stocks are taxed in the US. However, you must declare all of your overseas income on your Australian tax return.
As with Australian equities, any gain on US equities is subject to capital gains tax.
3) Do your research
To learn more about Alphabet, go online and visit the company’s Investor Relations page.
4) Confirm your investment strategy
People tend to invest in two ways: either with one purchase at a time, or in smaller, more stable amounts over time.
The latter method is often referred to as “dollar cost average,” a stock market hack that can help you pay less per share on average over time. Rather than waiting to build up a lump sum, this means that an investor’s money is put into the market immediately.
5) Place an order
Once you’re ready to buy shares of Alphabet, log into your investment account or trading app. Enter the ticker symbol GOOGL and the number of shares you wish to buy or the amount of money you are willing to invest.
6) Check Alphabet’s performance
Whether your stock portfolio is jam-packed with companies or just a handful of stocks, it’s important to review the performance of each component on a regular basis: monthly, quarterly, or annually.
This gives you the opportunity to review performance and ask if adjustments are needed to your holdings – to maintain the status quo, buy more shares, or sell existing shares.
How to sell shares
If you are happy with the performance of your stocks and want to take a profit, you should sell your holdings. To do this, log into your investment platform, enter the ticker symbol and select the amount you wish to sell.
Note that if you have made a substantial profit, you may be liable to pay Capital Gains Tax (CGT) if you sell your holdings. However, there is a 50% CGT rebate for Australian individuals owning an asset for 12 months or more. That means you’re only taxed on half of the net capital gains on that asset.
Learn more about CGT, tariffs and allowances here.
How to invest in Alphabet through a fund
Investing directly in individual stocks can be an engaging and hopefully profitable experience. It may also qualify you for shareholder benefits specific to the company in question.
However, investing directly in individual companies can make you vulnerable to stock market volatility and unanticipated fluctuations in stock prices. For this reason, financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold hundreds, if not thousands, of company shares.
A key component of the Nasdaq index, Alphabet can be found in many funds that have a US bias.
Note: When investing, it is possible to lose part of your money, and very rarely all of your money. Past performance is not a prediction of future performance and this article is not intended as a recommendation for any particular asset class, investment strategy or product.
frequently asked Questions
Is Buying Google Stock Safe?
Many consider Google a safe stock to invest in, as parent company Alphabet is likely to still be a profitable business even in less-than-ideal economic times.
Corresponding statisticsAs of June 2021, Google has maintained a 92.47% search engine market share, with the majority of revenue generated from advertising.
As with all equity investments, gains and returns are not guaranteed.
How much does it cost to buy a stock in Google?