Alphabet's Google Reveals Plan To Expand In Mountain View

Alphabet Inc.’s (NASDAQ:GOOGL) Google revealed its plan to significantly expand in its home city of Mountain View, CA, which entails the creation of office, retail, public and residential space on its owned land.

The tech giant is set to increase its office space to 2.13 million square feet, an increase of 1.18 million square feet. We believe the developments will enable the company to carry on with its new growth initiatives.

Google is emphasizing on fostering a sense of community and is partnering with a developer to construct up to 6,600 residential units on its land, of which 20% of the total residential unit will be made available to individuals in the extremely low- to middle-income category.

Coming to price performance, Alphabet’s shares have lost 0.6% on a year-to-date basis compared with the industry’s decline of 24.1%.

Property Purchases to Aid Expansion

Over the past few years, the company has spent at least $2.8 billion for property acquisitions in Mountain View, Sunnyvale, downtown San Jose and north San Jose.

Recently, the company purchased a 10 acre land for a sum of $110 million in San Jose. Notably, the acquisition is expected to create 20,000 jobs by 2035 alone. Google also bought the Chesapeake Commons office park in Sunnyvale earlier this year.

Google’s property purchase spree extends outside of Silicon Valley as well. The company spent $2.4 billion to buy New York City's Chelsea Market in April.

Alphabet Inc. Price and Consensus

Google and its Expanding Data Centers

Apart from developing its owned lands and purchasing new office spaces, Google has also announced plans to set up a data center in Denmark, which will be located just outside of Fredericia. This will mark the company’s fifth data center in Europe.

Notably, the search giant will invest EUR 600 million for the development of this new data center, which is likely to be an energy efficient one.

We believe the growing number of data centers bode well for the company. Not only do these strengthen its competitive position but also provide better storage for its vast search data, emails, photos and most importantly cloud data with advanced security.

Zacks Rank & Stocks to Consider

Currently, Alphabet carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader computer and technology sector include Generac Holdings Inc. (NYSE:GNRC) , SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) and Symantec Corporation (NASDAQ:SYMC) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Expected long-term earnings growth rate for Generac, SS&C and Symantec is 6.5%, 13.5% and 7.9%, respectively.

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