How to Buy Alphabet Shares UK
Alphabet is the parent company of Google (GOOG, GOOGL) and includes not just the search engine, but also holdings like YouTube, Android, and Waymo.
In this guide, we’ll show you how to buy Alphabet shares in the UK and provide information on whact factors typically consider when investing in Alphabet.
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Step 1: Find the Stock App That Offers Alphabet Shares
Alphabet shares trade on the NASDAQ stock exchange in the US. In order to buy shares, you’ll need a UK stock app that offers trading on US stocks.
There are many different stock apps to pick from. Let’s take a closer look at 2 options you can use to buy Alphabet shares in the UK today.
1. eToro – Popular Stock App with 0% Commission
The eToro stock app is a popular app among people who want to buy Google stock. This mobile-friendly broker offers trading on around 2,000 global shares, including a selection of over 800 stocks from the NASDAQ and NYSE stock exchanges. This means you can invest in companies like Amazon, Netflix, and Tesla. eToro also offers hundreds of ETFs, including funds that invest in the S&P 500 and US tech sector.
Trading with eToro is 100% commission-free. You get to choose between buying Alphabet shares outright or trading share CFDs with leverage up to 5:1. The platform has tight spreads to keep your trading costs down, too. The only downside is that eToro charges inactivity and withdrawal fees, but these are relatively small.
The eToro mobile app offers a wide variety of features for short-term trading and long-term investing alike. To start, the app includes a charting interface with over 100 different technical studies and drawing tools. You can set up watchlists, monitor a market news feed, and use stop-loss and limit orders to manage your trading risk.
On top of that, eToro gives you access to stock research from professional analysts. You can see 12-month price targets for Alphabet shares, for example, or dive into the company’s fundamentals to get the bigger picture behind the share price.
eToro is also a social trading app that connects you with thousands of other traders from around the globe. You can swap ideas, see what other traders think about Alphabet shares, or even copy the positions of professional day traders and investors.
eToro is regulated by the UK’s Financial Conduct Authority (FCA). The broker offers 24/5 customer support from inside the app. eToro is free to download for iOS and Android devices and you can open an account with just a £160 minimum deposit.
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2. Libertex – CFD Trading App with to Trade Alphabet Shares CFDs
Libertex is a CFD trading app that offers stocks, forex, commodities, and more. The broker carries a selection of more than 50 US stocks, including Alphabet shares. You can trade all share CFDs on this app with leverage up to 5:1.
Libertex isn’t commission-free, but it does keep trading fees to a minimum. The platform uses a set of fixed commissions that keep the cost of trading Alphabet shares to around 0.1% per trade. There are no spreads and no deposit or withdrawal fees when trading with this app.
This day trading app is specifically designed for trading around the price of Alphabet shares, more so than long term investing. It’s light on fundamental data, but offers more than 70 technical indicators and drawing tools in the built-in charting software. All of the studies can be customised with just a few taps.
You also have access to tools that help you stay ahead of the market, including customisable watchlists, a market news feed, and an economic calendar. Libertex also has a market sentiment gauge, which shows you whether other traders using the app are buying or selling Alphabet shares. This is particularly helpful for spotting sudden changes in price momentum.
Libertex is regulated by CySEC, the Cyprus Securities and Exchange Commission. You can get support for your account 24/5 via email, but unfortunately Libertex doesn’t offer in-app phone or chat support at this time.
Step 2: Analyse Alphabet Shares
Before you invest in Alphabet shares in the UK, it’s important to know as much as you can about this tech company. We’ll cover everything you need to know about where this stock has been and where it could be going in the future.
Alphabet Share Price UK
Google shares debuted on the NASDAQ stock exchange in 2004, 6 years after the company was founded by Larry Page and Sergey Brin. Shares were initially priced at $85 apiece, giving the company a valuation of $23 billion.
The share price had nearly quadrupled by 2006, when Google bought YouTube. The stock price dipped sharply in 2008 as a result of the economic crisis and a drop in online advertising, but surged to new all-time highs in 2012.
In 2014, Google did something unusual. The company split its existing Class A shares under the ticker symbol GOOGL to create a new set of Class C shares under the ticker symbol GOOG. The Class A shares retained voting power, while Class C shareholders would not have any voting power. The goal was to ensure that founders Larry Page and Sergey Brin could retain control over the company without hindering Google’s share price growth.
This split halved the share price of Google stock. But in 2015, Google conducted another stock split that gave Class C shareholders 2.7 shares for every 1,000 already owned by an investor. In addition, Google restructured itself under a new company name – Alphabet – although the stock ticker symbols remained the same.
At the end of these manoeuvers, Google shares – now Alphabet shares – were worth around $550 each. The stock grew sharply from 2016 to today, rising to a current price of $2055 per share.
Notably, Google shares did tumble briefly as a result of the COVID-19 pandemic. Shares dropped from $1,500 apiece in February to $1,075 in late March 2020. Since the March low, the share price has nearly doubled.
Alphabet Stock Fundamentals
At the current share price, Alphabet has a market cap of $1.39 trillion. It is the 5th largest company in the world by market cap, and one of only a handful of companies that have a valuation over $1 trillion.
Despite its massive size, Alphabet has been able to continue to grow its earnings per share (EPS). The company reported an annual EPS of $58.61 in 2020, up 19% from 2019.
At the same time, Alphabet has a price-to-earnings ratio (P/E ratio) of 36. This P/E ratio is relatively low for a major US tech company and suggests that Google could be undervalued.
Alphabet Dividend Information
Alphabet shares do not pay a dividend, and investors should not expect a dividend from this stock in the near future. Alphabet typically uses profits to reinvest in ‘moonshot’ projects like Google Fiber or the self-driving vehicles division Waymo, or cloud computing and artificial intelligence.
Is Alphabet a Good Investment?
Alphabet shares posted a gain of 29% last year. After years of momentum, is now a good time to buy Alphabet shares in the UK?
Alphabet shares may be either extremely undervalued or extremely risky, depending on how optimistic you are about the future of Big Tech. Let’s take a look at some of the factors that are driving Google’s growth as well as the outstanding risks that Alphabet investors face in the years ahead.
Bear in mind that regardless of whether you decide a stock is a good investment, there’s always a risk of losing your money.
Online Advertising Fuels Google’s Business
Alphabet is an absolutely massive company with a diverse range of business interests. But at the end of the day, Google is the crown jewel of Alphabet and the share price largely depends on how Google itself is performing.
The good news is that Google’s business is built around online advertising. In fact, Google along with competitor Facebook account for more than 70% of the global online ad market.
That’s a great market to not just be in, but also to dominate. Analysts expect online advertising to grow 20% in 2022 and by 14% per year for the next 4 years.
We’ve also seen over the past year just how resilient online advertising can be. Google announced its first year-over-year revenue decline in Q2 of 2020 as the coronavirus pandemic shut down the economy and advertising budgets were slashed. However, advertising spending roared back and Google had its most profitable year ever, even in the midst of the pandemic.
While the economy looks bullish and more shocks to online advertising aren’t expected, that’s an extremely strong sign that Google has built a durable business – and one that will see increasing returns for years to come.
Google is Growing Where It Matters
Right now, Google controls an estimated 90% of the global search market. While that’s downright incredibly, it doesn’t leave the company a lot of room for growth.
However, Google saw this coming early on – that was part of the motivation for the reorganization into Alphabet in 2015. The company now has a burgeoning cloud computing division, a huge investment in next-generation AI and voice search, and even investments in internet connectivity (Google Fiber) and self-driving vehicle technology (Waymo).
Some of these investments are more speculative than others. For example, it’s not clear whether Waymo will be able to deliver on self-driving vehicles before a competitor. But simply by being in this market, Google is setting itself up to participate in the next generation of technology.
What’s even more enticing for investors is that Google’s profitability is, at least for now, being hampered by these investments. Waymo, Google Fiber, and Google Cloud all suck up far more money than they produce. But that won’t be the case forever, and investors will likely have a chance to cash in when these investments finally start producing profits.
Google Faces Serious Regulatory Risks
In light of all this future upside growth, the main thing holding back Alphabet’s share price right now is regulatory uncertainty. Google’s dominance of online search, its duopoly in online advertising with Facebook, and its duopoly in smartphone software with Apple have all drawn scrutiny from regulators.
In fact, there are currently antitrust cases against Alphabet in both the US and Europe. These could carry hefty fines for Alphabet, but more importantly, they could threaten some of the key revenue-generating portions of Google’s business.
For example, the US case threatens Google’s practice of paying Apple to pre-install Chrome on all iPhones. That might not seem like a huge deal, but it would suddenly open the floodgates for competitors to eat away at Google’s dominance in mobile search. That’s one of the fastest-growing parts of the company’s business, so any regulatory changes could hurt Alphabet’s profitability.
These antitrust cases and broader regulations around Alphabet’s online advertising business will take years to be fully resolved. If the company navigates them without material changes to its business, look for Alphabet’s share price to skyrocket in the future. On the other hand, if regulators put strict limits on how Google can operate, a lot of Alphabet’s prospects for the future may come under pressure.
Step 3: Open a Stock Trading App Account
If you want to buy Alphabet shares in the UK, the next step is to open a trading account with a stock app.
To get started, search for the name of your chosen app in Google Play or the Apple App Store and download the app to your device.
Open the app and click ‘Join Now’ to create a new account. You can enter a new username and password for your account. You can also create an account using your Google or Facebook login.
Regulated brokers follow the FCA’s know your customer (KYC) rules and requires that you go through an identity verification step before trading. Use your phone to snap a photo of your driver’s license or the photo page of your passport, and then upload it using the eToro app. You’ll also need to snap a photo of a recent utility bill or financial statement that shows your address.
Next, fund your account with a deposit. You can usually pay with a debit card, credit card, PayPal, Neteller, or Skrill.
Step 4: Invest
Now that your stock trading account is ready, it’s possible to buy Alphabet shares in the UK on your phone.
Navigate to the app dashboard and tap the magnifying glass at the top of the screen. Enter ‘Alphabet’ and tap on it when it appears. Then tap ‘Trade.’
Next, enter the amount of money you want to invest in Alphabet shares. If you’re trading CFDs, select whether you want to apply leverage to your trade. You can also enter a stop loss or take profit level for your trade if desired.
Once your trade is ready, tap ‘Open Trade’ in order to complete your purchase of Alphabet shares.
Alphabet Shares Buy or Sell?
Alphabet is already one of the largest companies in the world, but this tech stock has room to grow even further. Google, the crown jewel in Alphabet’s portfolio, controls an estimated 90% of the online search market. It’s also built a durable business in online advertising that easily withstood one of the biggest challenges in Google’s history last year.
At the same time, Alphabet has positioned itself for the future. The company is working on AI, self-driving vehicles, and cloud computing. While these divisions are losing money right now, they could become major revenue drivers in the not too distant future.
While there are plenty of reasons to be optimistic about Alphabet shares, investors should exercise some caution. Alphabet, and specifically Google, is facing antitrust lawsuits in the US and Europe. Strict regulations could squeeze Google’s business and enable more competitors into the online search market, which could hurt Alphabet’s profitability in the future.
Overall, there are many analysts that believe Alphabet shares are a worthwhile investment today. However, UK investors will want to closely watch Google’s legal troubles and may need to rethink their position if Alphabet comes under additional regulatory scrutiny.
Remember, there is no guarantee you’ll make money investing in Alphabet and there’s always a risk of incurring capital losses.
Alphabet shares are poised for strong growth over the coming years, in large part due to the growth of online advertising. The company easily weathered the coronavirus pandemic and can now take full advantage of the online empire it has built. That said, investors will want to keep one eye on Alphabet’s regulatory troubles over the coming years.
Are Google and Alphabet the same company?Google is a subsidiary of Alphabet, which also owns Nest, Fiber, Verily, Sidewalk Labs, and more.
Who is the current CEO of Alphabet?The CEO of Alphabet and Google is Sundar Pichai, who took over from founders Larry Page and Sergey Brin in 2019.
Can I invest in Alphabet shares through an ISA or SIPP?Yes, you can invest in Alphabet with an ISA (Individual Savings Account) or SIPP (Self-invested Personal Pension). Your broker must offer these account types as well as trading on US stocks.
How does Alphabet make money?Google’s online advertising and search business is the main source of revenue for Alphabet. Google also makes money by licensing the Android operating system to smartphone manufacturers.
What companies does Google compete with?Google competes with a wide variety of tech companies, including Apple (in smartphone operating software), Facebook (in online advertising), Microsoft (in cloud computing and storage), and Amazon (in virtual home assistants and online shopping).