Smaller players get a piece of the pie.
The news of a stock split is always thrilling for investors. The technique has quickly acquired traction among businesses during the previous few years. A stock split increases the number of outstanding shares while lowering the value of each share individually. Companies split their stocks to make shares more accessible to small investors.
How's it going?
The news is something that both companies' shareholders can rejoice over, as stock splits typically give shares a new lease on life. The Amazon split happens on Friday, June 3rd, while the Google split happens later next month.
Both stocks have also dropped significantly in 2022. Alphabet's stock has lost over 20% of its value this year. The stock was pushed down by overall market headwinds and uneven first-quarter performance.
Amazon's stock has dropped even more, with a year-to-date loss of roughly 30%. After Amazon's poor first-quarter reports in April, the stock took a beating.
In the first quarter of 2022, Alphabet recorded a 23% increase in revenue year over year. Amazon's revenue climbed by only 7% in the first quarter. According to Wall Street, Alphabet is expected to outperform Amazon in revenue growth in the entire year 2022.
Who's the ultimate winner?
In the market, both companies are enormous behemoths. But there's always a winner, and this one is particularly difficult to choose. Alphabet may be currently better positioned than Amazon, given it has shown significant growth over many timeframes, has more diverse commercial operations, and has had more consistent quarterly results.
Though JP Morgan fuels Amazon's Q2 prospects, citing improvements in "important under-penetrated sectors" like CPG, food, clothes & accessories, and furniture/appliances. AWS is likewise optimistic about the prime price.