Alphabet Inc. (NASDAQ:GOOG) managers are incubating vibrant new businesses in pharma and tech
This might seem a particularly bad time to be investing in big tech.
President Trump said Tuesday morning that his administration would look into accusations that Google has been secretly working with the Chinese military. The charge came from Peter Thiel, a PayPal co-founder and strong supporter of the president.
On the other hand, Bloomberg reported Tuesday that DeepMind, the artificial-intelligence arm of Alphabet, might be on the cusp of a major breakthrough in the way new drugs are discovered.
It’s an important innovation. It’s hiding inside the search giant. And it couldn’t come at a better time.
This business is on to something really big. Using data, machine learning and AI, Alphabet managers are incubating vibrant new businesses with innovative business models. One or more of these will become exciting stand-alone businesses.
Some analysts are already doing sum-of-the-parts analyses and they like what they see.
Alphabet’s market capitalization is $798 billion, with units including YouTube, Google Search, Google Cloud, Android, the Nest security camera and peripheral businesses, Google Capital, and Stadia, its new video game streaming service set to launch in November.
Together, these parts are probably worth well over $1 trillion.
Until now, the business opportunity for DeepMind was not even on investors’ radar.
The subsidiary has its roots in DeepMind Technologies, a British AI startup that was making progress teaching computers the quirks of human short-term memory. Alphabet acquired the business in 2014.
DeepMind has come out of nowhere to be a major player in that ecosystem, and it is hiding inside Alphabet shares, practically for free.
The parent’s stock trades at 21 times forward earnings and 5.6 times sales. These metrics reflect the consensus view that Alphabet is an advertising business, subject to regulatory attacks.
The regulation is coming. That’s true.
But the story of the stock is its valuable pieces. Investors are fretting about a potential breakup of Alphabet. They should be embracing that possibility. It will lead to much higher stock prices as the value of its businesses comes to light.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1,194.99.
The projected lower bound is: 1,096.56.
The projected closing price is: 1,145.77.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 59.7597. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 59.96. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 28 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 54. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 25 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed down -0.020 at 1,146.330. Volume was 12% below average (neutral) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,139.90 1,115.79 1,116.57
Volatility: 14 28 35
Volume: 1,170,425 1,452,807 1,634,906
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
ALPHABET INC C is currently 2.7% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of GOOG.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on GOOG.O and have had this outlook for the last 19 periods.