Alphabet Inc. was worth more than Amazon.com Inc. for the first time in 16 months Friday, as the online-advertising giant’s strong 2021 stock rally continues.
Google parent company Alphabet
finished Friday’s session with a market value of $1.622 trillion, while Amazon
closed out the day with a $1.616 trillion valuation, according to Dow Jones Market Data. Shares of Alphabet rose 2% Friday, bringing their year-to-date gains up to 36.6%, while shares of Amazon rose 0.6% but are still down on the year.
Competition is heating up between the two tech giants, as Alphabet’s Google has stepped up its efforts in e-commerce. The company recently forged partnerships with Shopify Inc.
and others that will makes it easier for smaller merchants using those services to create product listings on Google’s various platforms like Maps and Shopping.
Though it’s free for companies to create listings, analysts expect that Google is trying to beef up its e-commerce platform to create a more attractive environment for advertisers. Amazon, too, has an e-commerce advertising business.
Alphabet is also dealing with a broader change in the advertising landscape given an increased emphasis on user privacy that’s prompted a move away from third-party cookies. Following a Google marketing event last week, Evercore ISI analyst Mark Mahaney was “increasingly appreciative of Google’s commitments to building privacy-friendly alternatives to third-party cookies that don’t compromise the effectiveness of targeting or measurement.” He also cheered the company’s shopping-related improvements.
Overall, Monness, Crespi, Hardt & Co. analyst Brian White said that Alphabet is “well-positioned for a continued recovery in digital ad spending in 2021,” though he expects continued antitrust scrutiny of the company.
Analysts see greater upside ahead for Amazon shares, which enjoyed better performance earlier in the pandemic before stalling more recently. The average price target among analysts tracked by FactSet who cover Amazon shares is $4,272.49, 33% above recent levels. The average price target for Alphabet shares is $2.791.48, which represents about 17% upside.