A lot of people watch YouTube day in and day out, and if you're an investor, you might get a feeling that YouTube is in the position the television was in the 80s. And if it is… it might be a great investment in a disrupting company. In this guide, we'll help you understand how to buy YouTube stock. It's a platform that everyone understands and can start with.
While you can't invest directly in YouTube, you can invest in its parent company Google. The stock to purchase is listed under Google's name, which is “GOOGL.”
What is YouTube?
Most people know what YouTube is. It's the most popular platform for watching user-created videos. These can take any form, within reason. Creators can upload a rough video straight from their phone, or they can put a lot more time and effort into editing. Generally, the platform favors those who create better quality videos.
But YouTube isn't just a free platform for watching videos. There are ads on those videos that generate money. That money is then split almost in half between the creator of the videos and YouTube itself.
When a creator generates millions of views, there are potentially millions of dollars to be made. That means that YouTube will benefit from a creator's success as much as they will.
In 2019, YouTube grew by 26%. The platform generated $15.15 billion during the financial year for 2019/20, which equated to about 9% of Google's total revenue for the year. Considering just how large Google is, that percentage is mind-blowing.
How to Buy YouTube Stock
Let's break this down a little, so you know what you need to do. As we've mentioned above, you can't actually buy stock in Youtube exclusively. The company is more of a platform now, and Google owns it. The tech giant parent company does have stock that you can purchase though.
At the time of writing, the only way to buy YouTube stock is to buy stock listed under Google's name, which is “GOOGL.” When searching for stock to purchase, search for Google's stock name instead of YouTube. You'll probably find nothing under YouTube, but anything you do find won't be the video platform you have in mind.
Should You Invest in YouTube?
YouTube (GOOGL) is a good stock to start out investing with because the company is accessible. With revenues only climbing each year, it's hard not to justify buying GOOGL stock to have a piece of that pie.
When YouTube's revenues increase, Google's revenues increase, this means that as long as people keep growing the platform, which it definitely looks like they will, then the stock price can only increase.
However, as with all stock, there are a few bumps in the road to consider. In early 2020 when the pandemic first struck the world, YouTube's ad revenue decreased dramatically. Companies pulled their budgets for fear of needing the cash. Later in the year, as it became clear that even more people watched videos than ever, the revenues actually increased again.
In 2021, it looks like YouTube will continue to benefit from lockdowns worldwide for the first half of the year. Even once people are more comfortable about being outdoors and with friends, though, YouTube is likely to have more views than ever before.
Finally, YouTube revenue has a predictable trend. In December, companies increase their ad budgets to sell more products over the holiday period. They then pull the revenue as views fall in the following January and February. This has happened every year since YouTube first launched. As a result, the best time to buy GOOGL stock is in January, when YouTube's revenue is low. The best time to sell is when income is at its highest in December.
As far as safe bets go with stock, YouTube is one of the best. It's a company that you know and can predict market trends for. While the stock price might be steep, it's only going to increase. Practice with this stock, and you'll be able to invest elsewhere in no time.
Now that you know how to invest in YouTube, why not read up on the meme stock trend that came out of WallStreetBets?