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After this year’s rally in technology stocks pushed the valuations of most megacap stocks to excessive levels, shares of Alphabet (GOOGL) are an exception. Alphabet is the only one of the five biggest technology companies by market cap priced at a discount to the Nasdaq 100 Stock Index ($IUXX) (QQQ). In times of economic uncertainty, investors are flocking to megacap technology stocks with strong cash flows and favorable growth prospects.
Shares of Alphabet are up +13% this month, nearly twice the gain of the Nasdaq 100. This month’s rally is the largest monthly gain in Alphabet in almost two years and has added more than $140 billion of market value to the stock. Aptus Capital Advisors said, “of the mega caps, Alphabet is the only one that has growth above 10%, that has a valuation that’s palpable, and which has the opportunity for multiple expansion.”
