"Alphabet ( NASDAQ:GOOG )( NASDAQ:GOOGL ) remains the dominant force in search and digital advertising, holding approximately 90% of the global search engine market share and capturing over 85% of search advertising spend worldwide. Advertising revenue, primarily from Google Search and YouTube, accounts for about three-quarters of Alphabet's total revenue, with third-quarter advertising at $74.2 billion out of $102.3 billion total. This core business continues to deliver strong growth, with Search & other advertising up 15% year-over-year during the period."
"Until earlier this year, though, Alphabet traded at valuations reflecting an advertising-dependent company, with concerns over cyclical ad spending and competition. However, starting early April, investor perception shifted dramatically. The market began pricing Alphabet as an artificial intelligence (AI) leader, driving significant stock appreciation and multiple expansion as AI adoption accelerated across its products. Amid broader market pressures and lingering AI disruption fears, Alphabet's stock hit lows, contributing to compressed valuations."
Alphabet holds roughly 90% of global search market share and captures over 85% of search advertising spend. Advertising revenue from Google Search and YouTube represents about three-quarters of total revenue, with third-quarter advertising of $74.2 billion out of $102.3 billion. Search and other advertising grew 15% year-over-year. Early-year valuations reflected ad-dependence and cyclical spending concerns, but investor perception shifted in April as the market began pricing Alphabet as an AI leader. EV/EBIT fell to multi-year lows during the downturn and later rose to about 23x, coinciding with a stock gain exceeding 64% year-to-date.
Read at 24/7 Wall St.
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