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Technology Stocks : Alphabet Inc. (Google)
GOOGL 320.01-1.0%Nov 26 3:59 PM EST
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To: Lizzie Tudor who wrote (9713)4/21/2006 3:59:40 PM
From: GVTucker  Read Replies (1) of 15857
 
Lizzie, RE: GOOGs business is not affected by inflation really.

Oh my.

Lessee....to the extent that inflation slows the economy, GOOG gets directly impacted because advertising expenses decline when the economy declines.

Since rising inflation increases interest rates, this would hit GOOG stock disproportionately because high PE stocks depend on future earnings to justify the stock price. Because those higher future earnings must be discounted back at a higher rate, that also hits the stock price.

High PE multiple stocks in general get hit harder by inflationary times than the average stock. GOOG will not be an exception.
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