Alphabet reported strong quarterly earnings to start 2025 but its stock has dropped 18% this year. The company, which did a 20-for-1 stock split in July 2022, has underperformed the S&P 500 with a 38% return since then. Analysts suggest that a stock split may not be beneficial at current share prices, as they are not high enough to deter investors. However, Alphabet remains a top tech stock due to its leading market positions in search, mobile operating systems, and online video distribution.
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.
Since the last stock split, Alphabet has returned 38%, underperforming the S&P 500 over the same time period, raising doubts about future splits.
There are plenty of better reasons to consider adding Alphabet to your portfolio due to its market leadership across various tech sectors.
Although stock splits can attract investors, Alphabet's current share price isn't high enough to necessitate this approach for boosting performance.
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