As Google-parent Alphabet Inc became on Thursday the fourth U.S. company to top market value of more than $1 trillion, some funds holding its shares are wondering whether now is the time to cash in on the stock’s extraordinary gains.
Shares of the Internet search giant are up nearly 17% over the last three months, outpacing a broader rally in the S&P 500 index over the same period by 6 percentage points, Reuters reported.
Alphabet’s shares are among a small group of stocks found in the top holdings of both mutual funds and hedge funds, two types of institutions whose investing styles tend to be markedly different, a Goldman Sachs analysis showed. That could leave it exposed to volatile price swings if sentiment suddenly changes.
According to Reuters, despite those concerns, many investors are finding it hard to say goodbye. The 28% climb in Alphabet and the performance of other technology and tech-related stocks helped money managers post big gains in 2019, making it difficult for many to justify cutting their exposure even as they fret over the implications of its run-up.
Alphabet is scheduled to report fourth-quarter earnings on Feb. 3. In its latest report, the company missed analysts’ estimates for third-quarter profit by about $1.7 billion, though it beat revenue expectations. That news did little to dent investors’ bullishness on the company: Alphabet’s stock