Will Alphabet Inc (GOOG) Become a Virtual Reality Powerhouse?

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There is little doubt that the next big paradigm shift within the media consumption space will be virtual reality, and companies like Alphabet Inc (NASDAQ:GOOG) seem to realise this. Google’s Cardboard VR headhet has been a hit, with over 5 million of the affordable devices already in use, but Alphabet Inc (NASDAQ:GOOG) seems to want to leap ahead of the competition with their very own standalone device.

We already know that Facebook and Sony are making major inroads into the VR space, and Microsoft is also betting its future on augmented reality, but could it be Alphabet Inc (NASDAQ:GOOG) who walks away as the leader within the VR space over the next few years? Alphabet has the reach required to roll out a new device, and if it’s affordable, powerful and able to be used without a separate computer (unlike the Oculus Rift) then they will likely lock up a majority of market share. Apple is likely years away from releasing any sort of VR device, and it surely will be costly to consumers. While I don’t doubt Apple’s ambition or their future success within the space, Alphabet seems to have the advantage of affordability and being an early mover.

Look for Alphabet Inc (NASDAQ:GOOG) to have a powerful stand-alone product ready for launch by the end of this year or beginning of next, and watch as virtual reality enters the mainstream in a major way. The stock decreased 0.10% or $0.71 on February 12, hitting $682.4. Approximately 2.14M shares traded hands. GOOG shares have risen 28.72% since July 10, 2015 and are currently uptrending. It has outperformed the S&P500 by 37.59%.

From a total of 28 analysts covering Google Inc. (NASDAQ:GOOG) stock, 24 rate it a “Buy”, 0 a “Sell”, and 4 a “Hold”. This means that 86% of the ratings are positive. The highest target price is $900 while the lowest target price is $700. The mean of all analyst targets is $826 which is 21.04% above today’s ($682.4) stock price. Google Inc. was the topic of 38 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Pacific Crest maintained shares on December 21 with a “Overweight” rating. Pivotal Research maintained shares with a”Hold” rating and a $740 target share price in their report from an October 23. UBS maintained GOOG stock in a recent report from October 23 with a “Buy” rating. Credit Suisse maintained the rating on October 23. Credit Suisse has a “Outperform” rating and a $850 price target on shares. Finally, Needham maintained the stock with a “Buy” rating in a report they issued on an October 23.

The institutional sentiment decreased to 0.67 in Q2 2015. It’s down 0.53, from 1.2 in 2015Q2. The ratio dropped, as 445 funds sold all their Alphabet Inc shares they owned while 412 reduced their positions. 109 funds bought stakes while 464 increased their total positions. Institutions now own 203.36 million shares which is 12.54% less than the previous share count of 232.53 million in 2015Q2.

Ancient Art L.P. holds 22.07% of its total portfolio in Alphabet Inc, equating to 213,887 shares. Jgp Global Gestao De Recursos Ltda. owns 38,052 shares representing 12.71% of their total US portfolio. Moreover, Cantillon Capital Management Llc has 11.84% of their total portfolio invested in the company, equating to 888,378 shares. The California-based Dalal Street Llc has a total of 11.16% of their portfolio invested in the stock. Glade Brook Capital Partners Llc, a Connecticut-based fund reported 50,799 shares owned.

Since February 25, 2015, the stock had 0 insider buys, and 25 selling transactions for a total of $312.83 million in net activity. Brin Sergey sold 16,670 shares worth $10.24M. Page Lawrence sold 16,670 shares worth $10.34 million. Doerr L John sold 5,269 shares worth $3.33M. Drummond David C sold 5,290 shares worth $3.39 million. The insider Mather Ann sold 6,000 shares worth $3.48M.

Alphabet Inc is a collection of Companies. The company has a market cap of $477.58 billion. The Company’s collection include Calico, Google’s health and longevity effort; Nest its connected home business; Fiber, its gigabit internet arm; and its investment divisions such as Google Ventures and Google Capital, and incubator projects, such as Google X. It has 29.78 P/E ratio. These will be managed separately in Alphabet.

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