Can You Invest in YouTube Stock?
Unfortunately, it is not possible to invest in YouTube stock directly.
That's because Google acquired YouTube for $1.65 billion in 2006 and now owns 100% of the company.
However, you can gain exposure to YouTube by investing in Google's parent company, Alphabet, Inc., which also owns Gmail, Android, Google Cloud, and many other properties.
You can therefore indirectly invest in YouTube by buying Alphabet stock, which is a publicly traded company listed on the NASDAQ with the stock ticker symbols GOOGL and GOOG.
As of January 2024, the stock price of GOOGL is $138.43 per share, while the stock price of GOOG is $139.93 per share.
If you're wondering what the difference is between them, GOOGL (class A) shares have voting rights, while GOOG (class C) shares have no voting rights.
Because of this, GOOGL is a better buy if it is either the same price or cheaper than GOOG.
YouTube is big and still growing
YouTube dominates the online streaming video market with over 2 billion monthly active users.
This data from Alphabet's annual reports shows how YouTube's ad revenue has grown in the past three years, from 2017 to 2022 (in millions of dollars):
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |
| Alphabet revenue | $110,855 | $136,819 | $161,857 | $182,527 | $257,637 | $282,836 |
| YouTube ad revenue | $8,150 | $11,155 | $15,149 | $19,772 | $28,845 | $29,243 |
| YouTube growth YoY | - | 36.87% | 35.80% | 30.51% | 45.88% | 1.37% |
| YouTube ads as % of revenue | 7.35% | 8.15% | 9.36% | 10.83% | 11.19% | 10.33% |
Even with YouTube's growth increasing far less in 2022 than in previous years, YouTube has continued to generate about 10% of Alphabet's revenue for the past few years.
YouTube's ad revenue has been growing over 30% per year until 2022, which, in the past, was often higher than Alphabet's overall revenue growth.
Note that this revenue number does not include the subscription revenue from YouTube Premium, YouTube Music, or YouTube TV. If it were included, then YouTube's overall percentage of Alphabet's revenue would likely be well over 10%.
What you are getting by investing in Alphabet
If you choose to invest in YouTube by buying stock in Alphabet, then you will also be investing in the following businesses:
- Google search: This is the biggest search engine in the world with close to 90% market share globally (YouTube search is actually the world's second-biggest search engine).
- Google Cloud Platform (GCP): Although smaller than Amazon Web Services and Microsoft Azure, Google Cloud is growing fast in the highly profitable cloud computing market.
- Android: The world's biggest mobile operating system.
- Google Play Store: Google's app store makes billions in revenue per year. It gets a percentage of the revenue for everything sold through the app store.
- Other apps that dominate their categories like Gmail, Google Maps, Google Chrome.
- Alphabet also owns the self-driving car company Waymo, the health company Verily, the AI company DeepMind, plus investments in dozens of other high-tech businesses that could become very successful in the future.
In this way, investing in Alphabet isn't just a way to get exposure to YouTube. It can be considered a diversified investment in online advertising, cloud computing, video streaming, artificial intelligence, and various other high-tech ventures.
