Which Alphabet share class should you purchase between GOOG and GOOGL?

You may wonder why there are two symbols available if you're considering purchasing shares in Alphabet, the parent company of Google

One of the biggest corporations in the world is Alphabet, the parent company of tech behemoth Google.

It is a leader in artificial intelligence (AI) and a member of the Magnificent 7 stock group. However, you will see that you have a decision to make if you decide to purchase Alphabet shares.

Alphabet is listed on two stock exchanges: NASDAQ:GOOGL and NASDAQ:GOOG. The two tickers stand for different Alphabet share classes.

Class A shares, also known as common stock, are referred to as GOOGL. Each share you own gives you one vote in any shareholder vote.

Watch the entire video here: Class C shares are referred to as GOOG. These grant you the same ownership stake in Alphabet's equity, but they do not grant you the ability to vote.

Both share classes have comparable prices because they represent the same amount of equity in Alphabet. However, because it gives you no voting power, GOOG typically trades at a slight discount to GOOGL.

On September 18, for instance, GOOGL closed at £349.54, whereas GOOG closed at £344.41.

Because each share class represents equity in a single company even though they trade independently, Alphabet's market capitalization, or market cap, is determined by adding the two share classes.

The two share classes may occasionally be divided; for instance, each share class is typically listed separately in a list of SandP 500 stocks or the holdings in a tracker fund.

Alphabet Class A is listed as the fifth-largest holding in the iShares Core S&P 500 UCITS ETF (LON:CSP1) as of September 18. Alphabet Class C is listed as the seventh-largest holding with 2.5 percent of the fund. However, Alphabet actually makes up 5.6% of the ETF and is the third-largest company in the S&P 500.

Which Alphabet stock class is the best to purchase?

The answer varies depending on your goals when purchasing Alphabet stock.

Alphabet's Class A stock (GOOGL) is the best option if you wish to exercise your shareholder voting rights.

However, GOOG is marginally less expensive, meaning you pay a fractionally lower amount for a very similar level of financial return (it has a dividend yield of 0.26 percent compared to GOOGL's 0.25 percent as of September 18) if you're not too concerned about voting and it's worth noting that, given Alphabet's market capitalization of over £4 trillion, your vote is likely to be a minuscule fraction of the total.

Don't worry too much about choosing which to purchase because, in actuality, the difference is negligible and capital gains are probably going to be comparable for both stock classes over the long run (GOOGL gained 148 percent in the five years to September 18, compared to GOOG's 143 percent).

The choice may be made for you based on the investing platform you use, as certain platforms only provide one class of Alphabet stock.

Does Alphabet stock exist in a third class?

Class B is a third class of Alphabet stock. In contrast to Class A and Class C shares (GOOGL and GOOG), Class B shares are not available for purchase because they are not traded publicly.

Class B shares of Alphabets are owned by company insiders, primarily senior executives. They convey ten votes per share, which means that while the company can still raise money through the stock market, senior executives have the majority of control over the decisions it makes.