Alphabet's Balloon-Powered Internet To Benefit Puerto Rico

Alphabet Inc. (NASDAQ:GOOGL) has received Federal Communications Commission’s (FCC) nod to fly giant balloons over Irma and Maria affected Puerto Rico to bring back wireless service in the island.

According to FCC, on Friday, 83% of the island’s cell sites were conked out, only slightly down from 84.6% the day before.

Per a Wired report, the tech giant has got approval for 30 balloons in Puerto Rico and the US Virgin Islands for up to six months.

We observe that Alphabet has gained 25.4% year to date, outperforming the S&P 500’s rally of 13.7%.

Project Loon at Rescue (Again)

Project Loon is Alphabet’s Internet project that utilizes high-altitude balloons to offer affordable Internet access around the globe to people without any access. These balloons have the capability to travel approximately 12 miles above the Earth. Using software algorithms, Project Loon sets the destination of the balloons depending on the wind.

Alphabet Inc. Revenue (TTM)

So, if all goes per plan, Project Loon is expected to help replace several out-of-service cell phone towers to provide voice and data services using frequencies of local carriers.

Alphabet served Peru earlier this year with Loon providing emergency internet service following heavy flooding.

Our Take

Alphabet is already mired in legal troubles practically across all continents. These have earned it a bad name on privacy concerns, anti-competitive concerns, patent infringements, tax theft and what have you. So, moves like this make sense as these could help the company improve its image.

Project Loon is already being tested in Peru and Sri Lanka. So, with the company finding another way of moving it more efficiently, it may get to market sooner.

Zacks Rank and Stocks to Consider

Alphabet carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Micron Technology, Inc. (NASDAQ:MU) , Applied Materials (NASDAQ:AMAT) and Jabil Inc. (NYSE:JBL) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings per share growth rate for Micron, Applied Materials and Jabil is projected to be 10%, 17.1% and 12%, respectively.

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