Google is one of the world’s largest technology companies. Its parent, Alphabet Inc. (NASDAQ: GOOGL), is one of the most valuable publicly traded companies, with a market capitalization of over $980 billion. Google has money to spend, and it is spending big, even with a recession likely this year.
According to a statement from CEO Sundar Pichai, Google will inject $175 million into diversity programs to increase its number of black employees and executives, while creating economic opportunities in major American cities.
Investors will see this as an important development. It puts the company under a positive light, especially considering the current social climate. The investment also makes good business sense, as it could attract talented professionals who might otherwise end up at competitors like Apple and Microsoft.
CEO Directly References Recent Social Unrest
Pichai didn’t skirt around the current social issues when announcing the news. In a blog post, the CEO said that “Over the past several weeks, violent and racist attacks against the Black community have forced the world to reckon with the structural and systemic racism that Black people have experienced over generations. My own search for answers started within our own walls. Google commits to translating the energy of this movement into lasting, meaningful change.”
With full transparency, Pichai has effectively announced that the decision is politically motivated. Google has fashioned itself as a progressive and highly liberal company, so this isn’t entirely unexpected. It’s a decision that some investors might not agree with, but the operational benefits are difficult to ignore.
By introducing more diversity, even if it is forced through investment, the company will become more balanced, robust, and open to new ideas. Google was built on innovation and was a major tech market disruptor before it became part of the establishment. By leading the way in social change, at least within its organization, the company has stayed true to its core values.
The $175 million investment will be broken up into several areas.
- $100 million will be directly injected into black startups and capital funding firms.
- $50 million will be allocated for financing and grants for promising small businesses in the black community.
- $15 million will go directly to training black job seekers.
- $10 million will support black developers to provide access to education and equipment.
In addition to the $175 million, Google has also pledged $3 million to American schools to fund STEM fields and computer science education.
Google Still One of the Best Growth Stocks
Regardless of opinions surrounding the current social conditions, there’s no denying that Google is one of the best investments available today. Shares in Alphabet have performed well in the year to date, with 8.45% growth despite the Coronavirus Pandemic.
Strong earnings and a likely price upside with an average target of $1,529 suggests there’s more growth to come.
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