Alphabet Inc. (GOOGL - Free Report) announced on Thursday that Eric Schmidt will be stepping down from the post of executive chairman in January, after his 17-year long tenure with the company.
However, Schmidt will continue to be part of Alphabet’s board of directors and will also serve as an advisor on technical and science issues to the company. The company expects its board to appoint a new non-executive chairman at its next meeting in January.
Schmidt played an instrumental role in the transformation of the search engine startup to the company that it is today. Schmidt led from the front when the company was taken public in 2004. He managed several product initiatives including Android, and also played a crucial role in the massive 2015 corporate restructuring, following which Google became a business unit of the holding company, Alphabet. His role as an executive chairman was to often put the company's accomplishments in front of the world and negotiate with governments on regulatory matters.
In his statement Schmidt said, "The time is right in Alphabet’s evolution for this transition.”
Notably, shares of Alphabet have gained 35.2% year to date, outperforming the 26.7% rally of the industry it belongs to.
Lawsuits Against Alphabet
Alphabet also faced some turbulence during Schmidt’s tenure. Major tech companies were hit by a class action lawsuit in 2011 in which executives of these companies, including Schmidt and the then CEO of Apple, Steve Jobs, were accused of conspiring to keep wages down by not recruiting one anothers’ employees. A settlement of $415 million was reached to resolve the lawsuit.
Recently, Alphabet faced lawsuits alleging pay discrimination against women. The company is also facing some antitrust actions in Europe.
Zacks Rank & Stocks to Consider
Alphabet has a Zacks Rank #3 (Hold).
Intel Corporation (INTC - Free Report) , IPG Photonics Corporation (IPGP - Free Report) and NVIDIA Corporation (NVDA - Free Report) are some of the better-ranked stocks in the broader technology sector. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Intel, IPG Photonics and NVIDIA is currently projected to be 8.4%, 12% and 10.3%, respectively.
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