According to a report by the Wall Street Journal, Google plans to cut “a small number of employees” at its cloud computing division as part of a reorganization process aiming to enhance operations at a business that has become of greater importance to parent company, Alphabet Inc.
Alphabet shares closed higher for the eighth time in the past ten trading sessions on NASDAQ on Friday. The stock went up 0.40% ($6.08) to $1,520.74. The latter also was the intraday high.
Shares of Alphabet Inc have risen 13.74% so far in 2020 compared with a 4.62% gain for the benchmark index, S&P 500 (SPX).
In 2019, Alphabet’s stock went up 29.10%, thus, it again outperformed the S&P 500, which registered a 28.88% gain.
“We recently communicated organizational changes to a handful of teams that will improve how we market, partner, and engage with customers in every industry around the globe,” a spokesperson for Google was quoted as saying by MarketWatch.
“We made the difficult, but necessary decision to notify a small number of employees that their roles will be eliminated. We’re working with our internal mobility teams across the company to help those affected by this change, and hope to find them new roles within the company,” the person added.
Google’s cloud computing division generated $8.92 billion in revenue during fiscal 2019, which compares with over $35 billion revenue for market leader Amazon Web Services.
Analyst stock price forecast and recommendation
According to CNN Money, the 42 analysts, offering 12-month forecasts regarding Alphabet Inc’s stock price, have a median target of $1,600.00, with a high estimate of $1,800.00 and a low estimate of $1,270.00. The median estimate represents a 5.21% upside compared to the closing price of $1,520.74 on February 14th.
The same media also reported that at least 37 out of 46 surveyed investment analysts had rated Alphabet Inc’s stock as “Buy”, while 5 – as “Hold”.