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Explain this story: History Says Alphabet Stock's 15% Pullbacks Have Usually Paid Off Within a Year
Explain like I'm 7
Alphabet's price dropped a lot, like it has before. Most times that happened, the stock price went back up within a year.
Other · Historical pattern of 15% stock pullbacks recovering within a yearThe Motley FoolSector and industry: Communication ServicesInternet Content & InformationTell me moreShow less
Explain like I'm 7
Alphabet's price dropped a lot, like it has before. Most times that happened, the stock price went back up within a year.
What happenedFrom the article
- Alphabet's stock has seen 15% pullbacks from its record highs.
- Nine out of ten such instances since 2012 resulted in the stock being higher a year later.
- The exception was 2022, when a significant drop in led to a prolonged decline.
- Alphabet's is currently growing, despite concerns about rising capital expenditures.
Why investors careOur explanation
A pullback is a drop in stock price from a recent high. Whether a company's profits keep growing after such a drop often depends on operating income, which is money left after running costs are paid, and on capital expenditures, which is money spent on things like equipment or infrastructure that could reduce cash available now even if it supports future growth.