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Alphabet’s drone unit: Can Wing take higher shares?


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alphabetical (NASDAQ:GOOGLNASDAQ:GOOG) self-service drone service, Wing, will launch in the Dallas area on Thursday. It will be the largest such testing program in the United States. Wing’s drones can carry around 2.6 pounds of cargo and travel 65 miles per hour. Additionally, the drone is capable of a round trip distance of 12 miles. While that won’t quite boost GOOG stock that day, it’s exciting for long-term investors.

In addition, the company will partner with Walgreens (NASDAQ:WBA), Easyvet, Blue Bell Creameries and Texas Health to deliver over 100 items to customers. This ranges from ice cream and pet medicine to first aid for children and over-the-counter medications.

Wing is also testing in Virginia, Finland and Australia. And so far, more than 200,000 deliveries have been made at the start of this year.

Of course, this isn’t Alphabet’s first foray into shipping and delivery. The company is well known for its self-driving unit, Waymo. In fact, the unit recently announced that it will be expanding its self-driving testing to San Francisco — all the more reason for investors to keep an eye on Alphabet.

Additionally, Alphabet isn’t the only major tech company to dabble in drone deliveries. Between Alphabet’s new adventure and Amazon (NASDAQ:AMZN), the latter was the best known. According to Business Insider:

“Amazon is planning a September launch for commercial testing of its drone delivery service in California and Texas, delivering items under 5 pounds. Eventually, Amazon plans to operate 145 drone launch stations and deliver 500 million drone packages per year, documents obtained by Insider say.

Interestingly, the two companies are also planning a 20-to-1 stock split this summer. Alphabet expects its split to take place on July 15, which was announced when the company reported better-than-expected earnings. Due to the company’s high-quality balance sheet and strong growth estimates, GOOG stock has been a beacon amid recent equity market volatility.

So, is Wing really moving the needle here in the short term? No, not exactly.

Due to the size of the business, almost any new business will take time to make a financial impact. However, the good news is that Alphabet continues to expand its portfolio of logistics solutions. Beyond Wing and Waymo – the latter comprising self-driving trucking and taxi services – this portfolio includes Google Maps, Google Earth, Waze and Sidewalks Lab. In turn, these are all good things for Alphabet and GOOG stocks.

As of the date of publication, Bret Kenwell had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Alphabet’s drone unit: can the wing increase its market share? appeared first on InvestorPlace.

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