Google-parent Alphabet is the IBD Stock of the Day. Google stock has gained 28% in 2024 but shares have ping-ponged since July after the stock hit an all-time high.
As it stands, Google stock has neared a cup-with-handle buy point of 182.02. Its relative strength line is still well off highs but trying to come back.
The impact of generative artificial intelligence on the internet search advertising business of Google stock remains a key issue for investors. Also, antitrust lawsuits filed by the Department of Justice have pressured Google stock.
Google Stock All-Time High
Google stock hit an all-time high of 191.75 on July 10. But Alphabet stock swooned, pulling back along with most of the Magnificent Seven amid a market rotation out of the technology sector.
The company's Relative Strength rating currently stands at 71 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better.
Google stock holds an Accumulation/Distribution Rating of B. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Further, shares hold an IBD Composite Rating of 95 out of a best possible 99. The best growth stocks have a Composite Rating of 90 or better.
Amid Donald Trump's victory in the 2024 Presidential election, one view is that a TrumDOJoJ may be more open to a settlement than the Biden administration.
Meanwhile, the Justice Department has told a federal judge that it may ask for a breakup of Google as a possible antitrust remedy.
'DoubleClick' Ad Antitrust Case
A federal judge on Aug. 5 ruled that Google has violated antitrust laws by engaging in unfair business tactics to dominate the internet search advertising market. Alphabet's $20 billion in annual payments to Apple, which makes Google the default search engine on iPhones, were a central part of the government's case.
Further, a second phase of the trial must now take place to determine what remedies the federal court will order. In a worst-case scenario, the Apple search deal could be scuttled, an analyst says. A ruling could come by August 2025.
Still, Google will likely appeal.
Meanwhile, another government antitrust lawsuit versus Google started Sept. 9. Some analysts call it the "DoubleClick trial." In 2008, Google acquired leading digital advertising firm DoubleClick for $3.1 billion.
The DOJ claims Google's dominance of the digital ad market has damaged advertisers and content creators. Testimony wrapped up in late September. Closing arguments are set for Nov. 25.
Further, the artificial intelligence landscape is key for investors.
Google Stock: AI Overviews Search
In third quarter earnings results, AI-infused internet search showed signs of boosting Google's core advertising business. Google began deploying AI Overviews in the U.S. in mid May, with conversational summaries topping links for many search queries. The AI Overviews system used Google's in-house Gemini AI model. Advertisers utilizing Gemini AI tools see increased traffic and click-through rates, especially among younger demographics, Google says.
Meanwhile, generative AI startup OpenAI on Oct. 31 finally launched its long-awaited ChatGPT web search, a direct competitor to Google. The latest version of the AI chatbot will allow users to search up-to-date information from across the internet, powered by real-time third-party search providers and content partners.
On the other hand, Google is fighting back. In December, it's expected to roll out "Jarvis," an AI tool that uses web browser information to complete tasks. The Jarvis tool takes over a person's web browser to complete tasks such as gathering research, purchasing a product or booking a flight.
Amid worries over generative AI, there are bright spots in Alphabet's portfolio that could lift Google stock. Waymo is widely viewed as the leader in autonomous vehicles.
In October, Waymo closed a $5.6 billion funding round, including Google and previous investors.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
