As Google-parent Alphabet Inc became the fourth US firm to top a market value of more than Sh100 trillion ($1 trillion) last week, some funds holding its shares are wondering if now is the time to cash in on the stock’s extraordinary gains.
Shares of the Internet search giant are up nearly 17 per cent over the last three months, outpacing a broader rally in the S&P 500 index over the same period by six percentage points.
Short interest in the stock, a measure of how many investors are betting on a price decline, is at one per cent, near a 52-week high for the company and higher than competitors such as Microsoft and Facebook, according to Refinitv data.
Alphabet joins Apple, Amazon.com and Microsoft as the only US firms to hit $1 trillion in market value. “Google is a stock that won’t get you fired,” said Kevin Landis, a portfolio manager at Firsthand Funds who hasn’t added to his current Alphabet position since the first quarter of 2019.
“Will I be able to double my money in this stock from here? I’m not sure about that.” Alphabet’s shares are among a small group of stocks found in the top holdings of mutual funds and hedge funds, two types of institutions whose investing styles tend to be different, a Goldman Sachs analysis showed.
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That could leave it exposed to volatile price swings if sentiment suddenly changes. Despite those concerns, investors are finding it hard to say goodbye.