With Google parent Alphabet poised to complete its 20-for-1 stock split after the market close on Friday, the recent splits by Amazon.com and Shopify may give investors reason for caution. While GOOGL stock could get a boost, both AMZN stock and SHOP stock have retreated since their stock splits amid the bear market in tech stocks.
Google reports second quarter earnings on July 26. Consensus estimates have been coming down ahead of the earnings report for Google stock.
In the long run, the stock splits could make the companies more affordable to retail investors. As it stands, institutional ownership has improved at Google but lags at Amazon and Shopify.
GOOGL stock owns an Accumulation/Distribution Rating of C, according to IBD Stock Checkup. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Both Amazon stock and Shopify stock own Accumulation/Distribution Ratings of D+.
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Could GOOGL Stock Join Dow?
In the case of Google stock, the stock split could pave the way for the tech giant to enter the Dow Jones Industrial Average, analysts say. But that may not happen until 2023.
Amazon's 20-for-1 stock split took effect June 6. AMZN stock has retreated 8% since its split as of July 13.
SHOP stock has retreated over 12% since its split on June 29.
In 2022, Google stock has fallen 20% while AMZN stock is down 34%. SHOP stock has plunged 76%.
According to Bank of America, companies that announce stock splits see their shares gain 7.8% on average in the next three months, beating the S&P 500's 2.1% gain in that time. One year after an announcement those stocks are up 25%, better than the index's 9% average, says BofA.
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