Why Alphabet CEO’s Insider Selling Is NOT a Red Alert Moment for GOOG Stock

Stock Market

It’s certainly a notable that the CEO of Google and YouTube parent company Alphabet (NASDAQ:GOOG;NASDAQ:GOOGL) lightened his share position. Yet, this shouldn’t be a deal breaker for Alphabet’s investors, and we’re assigning Google stock a fairly confident “B” grade today.

Alphabet is not a perfect company. Indeed, Google’s missteps in generative artificial intelligence have been cringe-inducing, but Alphabet remains a giant and an innovator in the high-tech space. Plus, as we’ll discuss in a moment, the company’s venture into automotive technology could prove to be a game changer someday.

Not-so-Scary Details of Alphabet CEO Share Sale

So, here’s the lowdown on Alphabet CEO Sundar Pichai’s recent financial transaction. Reportedly, Pichai sold 22,500 Alphabet shares on June 20.

There’s really no need to freak out about this. Even after that divestment, Pichai still held 227,560 shares of Alphabet. This was more of a position trimming than a full-scale dumpage.

If you’re an investor, then you should focus on your conviction in Alphabet as a company. If Pichai’s share sale has shaken your faith in the company, we encourage you to review our summary of Alphabet’s estimate-beating revenue and earnings results for the quarter ending March 31.

We generally concur with Lakehouse Global Growth Fund analysts, who “remain positive on the range of outcomes in the years ahead” for Alphabet.

The Lakehouse Global Growth Fund analysts took note of Alphabet’s “strong quarterly result,” which included 15.4% year-over-year revenue growth and 46% operating income growth. It’s hard to argue with those results, wouldn’t you agree?

Don’t Overlook This Opportunity for Alphabet

The Lakehouse Global Growth Fund analysts also noticed that Alphabet’s revenue growth “accelerated” in multiple segments. These included Search, YouTube Ads and Google Cloud. That’s encouraging, but there’s another area in which Alphabet might demonstrate growth soon.

There’s been a lot of chatter about Tesla’s (NASDAQ:TSLA) upcoming robotaxi unveiling, which is expected to happen on Aug. 8. Yet, Tesla isn’t the only “Magnificent Seven” company getting into the autonomous-vehicle game.

It sometimes feels like the market is completely ignoring Alphabet’s self-driving vehicle technology division, known as Waymo. However, it could be claimed that Waymo is ahead of Tesla’s autonomous-vehicle division.

As Barron’s pointed out, “Teslas don’t truly drive themselves yet, though. But Alphabet’s Waymo division has a fleet of autonomous taxis expanding slowly across the country.”

Bank of America Securities analyst Justin Post calculated that Waymo could realistically “get to a $144 billion revenue opportunity.”

That, Barron’s extrapolated, “implies Alphabet’s robotaxi business could be worth roughly $1 trillion someday.” No guarantees will be made here, but it’s another reason for investors to take an interest in Alphabet.

Google Stock: CEO Share Sale Shouldn’t Shake You Out

Alphabet’s foray into autonomous-vehicle technology probably won’t boost the company’s income in the near term. Yet, it could eventually add to Alphabet’s already substantial revenue streams.

The takeaway today is that Alphabet is a gigantic, well-capitalized business based on its Search, YouTube Ads and Google Cloud revenue growth. Any future robotaxi revenue would only sweeten the deal for Alphabet’s investors.

Therefore, there’s no need to panic-sell your Google stock based on the CEO’s relatively small share sale, and we’re giving the stock a “B” grade with no immediate worries.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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