Why Alphabet Is a Good Investment Despite Its Post-Stock-Split Slump
Google's parent Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) made its stock more affordable to retail investors when the company performed a 20-for-1 stock split on July 15. But the share price has suffered since then, hitting a 52-week low of $96.87 for its class A shares on Sept. 27, a far cry from the high of $151.55 reached in February.
Macroeconomic factors are to blame. Tech stocks in general have been hit hard in 2022 due to persistent inflation and rising interest rates. Even Alphabet CEO Sundar Pichai talked about "an uncertain global economic outlook" during the company's July 26 second-quarter earnings call.
On top of that, the advertising industry experienced a year-over-year ad spending decline in recent months. Over 80% of Alphabet's revenue stems from advertising, so the ad industry's softness combined with the other macroeconomic factors drove Alphabet's stock price drop.
Source Fool.com
