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Why Alphabet Stock Jumped Today

By Evan Niu, CFA - Apr 14, 2020 at 3:39PM

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Tech companies are doing what they can to contribute to beating the novel coronavirus pandemic.

What happened

Shares of Google parent Alphabet (GOOG -1.79%) (GOOGL -1.77%) have jumped today, up by 5% as of 3 p.m. EDT, after tech stocks rallied on hopes that the U.S. is making progress in containing the COVID-19 outbreak. Google and other tech companies have been trying to provide tools that can assist in those efforts.

So what

Google has partnered with Apple (AAPL 0.88%) to incorporate contact-tracing technology into each of their dominant mobile operating systems, which power nearly every mobile device in the world. The companies will use application programming interfaces (APIs) that include interoperability in an effort to help inform public health officials.

Googleplex

Image source: Google.

Both companies have been sharing additional details with media outlets like The Verge and TechCrunch, including addressing potential privacy concerns around the apps. Apple has a strong reputation for protecting privacy, while Google does not due to its core advertising business.

Separately, Google announced a new tool designed to help local journalists map COVID-19 cases to help readers better understand how their local areas are being impacted.

Now what

The coronavirus outbreak is already hurting ad budgets as advertisers brace themselves for a potential recession that could dramatically impair consumer discretionary spending. Facebook has already warned that its ad business is being affected while simultaneously seeing a surge in usage of non-monetized services like Messenger and WhatsApp.

The silver lining is that Google and Facebook are expected to experience smaller declines compared to other ad-based businesses, even as analysts are now modeling for both ad juggernauts to post their first drops in annual revenue ever.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Apple and Facebook. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Facebook. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$119.55 (-1.77%) $-2.15
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$120.32 (-1.79%) $-2.19
Apple Inc. Stock Quote
Apple Inc.
AAPL
$174.55 (0.88%) $1.52

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