Ten years after its IPO, Google stock is up almost 1,200%. What do the next ten years hold for the technology giant?
It’s almost hard to believe that Google stock turns ten this week.
Google (Nasdaq: GOOGL) was founded in 1998 by two Stanford graduate students. What started as a quaint but breakthrough search engine has grown into arguably the most important internet company in the world.
The company went public on August 19, 2004 and ten years later the stock has had quite a ride.
The chart below comes to us from Business Insider and shows the stock’s meteoric rise from a split-adjusted IPO price around $50 to today’s prices, a rise of almost 1,200%.
Source: Business Insider
The one major drop in the stock’s chart came around the summer of 2008 after a weak earnings report and commentary from then-CEO Eric Schmidt in which he called the economy “challenging.”
It was the low point for Google stock during the financial crisis unlike most stocks, which bottomed in March 2009. It took Google stock just over a year to double after its 2008 low and the company hasn’t looked back since.
Today Google is the #1 or #2 company in several industries. Even if you think the Apple (Nasdaq: AAPL) iPhone is the world’s #1 smartphone there’s no question that the #2 phones all run Google’s Android operating system. And many would argue that the distinction of being #1 goes to Google.
Google’s AdWords product remains one of the most powerful advertising tools in the world.
For millions of people, myself included, Gmail is central to how they communicate with others.
Google’s self-driving cars are becoming more and more clever and its only a matter of time before Google finds a way to monetize this revolutionary technology.
Google Glass, the company’s augmented reality glasses, are starting to become more and more commonplace, especially in America’s big cities.
And the company will soon enter the medical device industry through a partnership with Novartis (NYSE: NVS) when it uses Bluetooth-powered Google contact lenses to constantly monitor glucose levels in tear fluid for diabetics.
Now Google is tackling bigger challenges.
One of these challenges is death and aging, an initiative launched by Google and others called the California Life Company (Calico).
Another of these challenges is trying to bring the internet to 4.3 billion people who don’t currently have access to it. Google’s Project Loon aims to use a fleet of weather balloons to give wi-fi access to parts of the world without internet.
What do the next 10 years hold in store for Google?
The important question for Google investors is obviously, “what’s next?”
For starters, the day that Google pays a dividend is likely approaching pretty quickly. Google’s cash hoard has reached $61 billion. It rose $4 billion from the previous quarter despite the company spending $2.24 billion on research & development.
Source: Google Finance
At some point Google’s ability to grow its cash pile will outpace its ability to spend it on acquisitions and new products. I would argue that time has already arrived, thus I fully expect the company to initiate a regular dividend or massive buyback program any day now.
But Google is also branching into lots of new territory, territory that could drive Google stock for the next ten years.
With acquisitions like Nest, a company producing tools for the “smart home,” Google seems to be betting big on the ‘internet of things.’ The company is also investing heavily in robotics.
It’s unclear exactly what the future looks like according to Google but it’s pretty clear it involves an entirely internet-connected world where humans can monitor and control just about everything in their lives through the internet and are assisted by robots like never before.
If you think about how incredible the last ten years have been for Google it makes me wonder in awe about how incredible the next ten years will be.
Happy 10th birthday, Google stock.
Jay Taylor personally owns shares of Apple.
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