Mountain View, California-based Alphabet Inc. (GOOGL) is a multinational technology conglomerate holding company offering various products and platforms. With a market cap of $2.1 trillion, GOOGL provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and GOOGL definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the internet content & information industry. The internet media giant has been a leader in artificial intelligence (AI) for years, utilizing AI as a key component of Google's search algorithm.
Despite its notable strength, Alphabet slipped 11.9% from its 52-week high of $191.75, achieved on Jul. 10. Shares of Alphabet gained 4.4% over the past three months, trailing behind the Nasdaq Composite’s ($NASX)9.7% gains during the same time frame.
In the longer term, shares of Alphabet rose 21% on a YTD basis and climbed 25.2% over the past 52 weeks, underperforming NASX’s YTD gains of 28% and a solid 34.8% return over the last year.
To confirm the bullish trend, Alphabet has traded above its 50-day and 200-day moving averages since late October, with slight fluctuations recently.
Alphabet's recent underperformance stems from the U.S. Justice Department's request to divest its Chrome web browser as part of an ongoing antitrust case. This move highlights increasing regulatory pressure, posing significant implications for Alphabet's business and reputation. Additionally, the rise of AI and chatbots threatens Google's search advertising dominance, potentially eroding its long-standing market advantage.
On Oct. 29, GOOGL shares closed up more than 1% after reporting its Q3 results. Its revenue stood at $88.3 billion, up 15.1% year over year. The company’s EPS increased 36.8% year over year to $2.12. GOOGL surpassed Wall Street estimates on both EPS and revenue.
In the competitive arena of internet content & information, Meta Platforms, Inc. (META) has taken the lead over Alphabet, showing resilience with a 62.3% uptick on a YTD basis and a solid 72.9% gain over the past 52 weeks.
Wall Street analysts are bullish on GOOGL’s prospects. The stock has a consensus “Strong Buy” rating from the 50 analysts covering it, and the mean price target of $210.61 suggests a potential upside of 24.7% from current price levels.
