Alphabet Inc.’s (GOOGL) Google will build a new subsea cable that connects the U.S., the U.K., and Spain to expand the global internet infrastructure.
Shares were down 1% on July 28 at $1,516.48 per share.
According to a Bloomberg report on July 28, the fiber line is dubbed, “Hopper” after the computer scientist, Grace Hopper. It will be Google’s first subsea route to Spain and one of the first new cables that will connect the U.K. and the U.S. since 2003. The company expects to complete the Hopper connection in 2022, which is said to carry 98% of international internet traffic.
Google has been working on other subsea projects with individual U.S. connections running to Chile and France. The company is also working to connect South Africa to Portugal with a new submarine cable that Google says is the first subsea cable to “incorporate optical switching at the fiber-pair level rather than traditional wavelength-level switching.” Google is contracting Alcatel Submarine Networks to make the link from Cape Town to Lisbon.
J.P. Morgan analyst Doug Anmuth believes Google is worth 35% more than where shares currently trade, which would be about $2,000 per share or a market capitalization of $1.4 trillion. However, he says the company’s underperformance could be from the impact of COVID-19 on its “more mature” Search segment, as well as U.S. regulatory investigations and ongoing questions about profitability levels. On July 28, the analyst reiterated a Buy rating on the stock and a price target of $1700, which implies 12% upside potential.
Google’s stock is up 14% year-to-date with a Strong Buy analyst consensus that breaks down into 28 Buy ratings versus 1 Hold ratings and no Sell ratings. The $1,649.88 average price target suggests 8% upside potential for the shares in the coming 12 months. (See Google’s stock analysis on TipRanks).
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