While speaking to CNBC, legendary trader and investor Warren Buffet stated that Google stock, Alphabet (GOOGL), could beat 90%-95% of the stocks picked by Wall Street. GOOGL’s price rallied by about 3.65% to $370.36 soon after the interview was aired. His statements seem to have elevated investor sentiment. Buffet’s firm, Berkshire Hathaway, currently holds about $31 billion worth of GOOG shares. Berkshire Hathaway’s holdings are only behind Apple and American Express.
Why Is Warren Buffet Bullish On Google Stock?
Many thought that Berkshire Hathaway’s new CEO Greg Abel was behind the company’s recent Google stock purchases. Buffet, however, clarified that he had initiated the purchase. The veteran traded did highlight that Abel, nonetheless, has the final say.
Buffet’s bullish outlook on Google is not surprising. Parent company Alphabet reported a Q1 revenue increase of 22% to $110 billion. Google Cloud sales, meanwhile, spiked by nearly 63%. According to the filing, the company generated $174 billion in operating cash flow in the last year.
Despite his bullish outlook on Google’s stock price, Buffet noted that there are some risks. Alphabet has plans $180 billion to $190 billion in capital spending this year. He noted that the figures are far higher than what railroads ever spent.
While Citi and Morgan Stanley have raised their stock price target for Google to $671 and $415, respectively, some other Wall Street analysts have reduced their targets. Wells Fargo decreased their target from $435 to $416. UBS lowered their Google stock price target from $410 to $400. Wall Street’s average stock price target for the company is currently around $435.78.
Also Read: Wells Fargo And Citi Decrease Microsoft Stock Price Target
Google’s foundational work was also highlighted by Elon Musk. Musk had stated in a podcast that Google will be one of the most significant beneficiaries of the AI boom due to the work done over the last few decades.