Shares of Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) were moving higher last month as the Google-parent rode a rising tide in technology stocks and the popular FAANG play in particular. Though there was no major news out on the company during January, the market seemed to be anticipating a strong fourth-quarter earnings report.
According to data from S&P Global Market Intelligence, the stock gained 12% last month. As the chart below shows, the stock price rose steadily during the month, gaining in almost every session.
There was little specific news out on Alphabet in the period, and the stock seemed to rise in tandem with the Nasdaq and on momentum from its 33% rise in 2017. Alphabet has been a popular play lately as the company's revenue and profits have moved consistently higher on the strength of its search advertising business and hopes for its so-called moonshots like the Waymo self-driving car division, which is currently embroiled in a series of legal battles with Uber.
Yet the search giant has given up much of last month's gains after its earnings report came out on Feb. 1 and as it was caught up in the broader market sell-off.
Alphabet stock fell 5% on Feb. 2, the day after the company issued fourth-quarter results. Per-share profit increased from $7.56 to $9.70 but came in below expectations at $9.98, as the growing fees that the company has to pay to gadget makers like Apple to be the de facto search engine are eating into bottom-line growth. The top line remained strong: Revenue increased 24% to $32.3 billion, ahead of consensus analyst estimates at $31.9 billion.
Alphabet's sell-off was compounded by the market's crash on Feb. 5, and the stock has now given up nearly all of its gains from January. But as the company continues to dominate search and is still growing briskly, shares should eventually bounce back from the recent dip.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.