Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) saw its market capitalization pass the $2 trillion mark in November. GOOG stock has since slipped, dropping the market cap to $1.89 trillion (more on that in a moment).
Source: Castleski / Shutterstock.com
Alphabet is a multifaceted company. However, the reason for its phenomenal growth lies with just one business: advertising. 23 years after the founding of Google, ad sales through Google Search and YouTube still account for about 80% of Alphabet’s revenue.
So where’s the next trillion dollars on the market cap going to come from? According to Alphabet’s CEO, the future looks a lot like the past.
The company says search ad sales will continue to drive growth for the foreseeable future. If that assumption sounds boring, or even risky, Alphabet sees AI — one of its big bets over the past decade — helping to keep the momentum going.
It’s time for a deeper dive on these topics, because if Alphabet hits the $3 trillion market cap level, GOOG shares at current prices (especially during the current dip) are going to seem like the deal of the century.
Google Search is what started this company and it’s still the engine that drives Alphabet. In the company’s latest quarter, Google Search alone accounted for $37.9 billion in revenue. Throw in advertising revenue from YouTube and other Google services and the number climbs to $53.1 billion. With total company revenue for the quarter…