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.
Meanwhile, Google stock has gained 23% in 2024. Also, GOOGL stock has formed a new cup-with-handle base from a technical view. But shares had pulled back for three straight trading sessions as of midday Nov. 15 as the Nasdaq retreated again.
Google stock hit a new all-time high of 191.75 on July 10. But Alphabet stock swooned during the summer, pulling back with some of the Magnificent Seven
Still, some analysts are upbeat.
"The steep discount Google receives to other Magnificent Seven names and its (S&P) Communications Services peer Meta Platforms, which we believe is largely due to regulatory pressures, could start to dissipate as some of the most daunting outcomes are unlikely to come to fruition," said Angelo Zino, analyst at CFRA Research, in a report.
Google Stock: AI Overviews Gains Traction
Further, the artificial intelligence landscape is key for investors. Google's 'AI Overviews' highlighted Alphabet's third quarter earnings report, giving ammunition to bulls that contend Google will prevail amid fierce AI competition.
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.
In Q3 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.
However, legal woes continue amid DoJ antitrust cases. Amid Donald Trump's victory in the 2024 Presidential election, one view is that a Trump DoJ may be more open to a settlement than the Biden administration.
Cloud Computing, YouTube, Waymo
Also, analysts say Google stock is getting a boost from the Performance Max advertising platform. It automates buying across YouTube, internet search, display, Gmail, maps and other applications. Performance Max lets advertisers manage campaigns across all Google ad inventory.
Aside from Google's core internet search advertising business, Wall Street analysts view growth at YouTube and cloud computing as key. Another question is the performance of Google's hardware business, where it's battling Apple in smartphones.
Google aims to slow down the growth of TikTok with its own short video platform. How much money Google generates from YouTube Shorts is a key issue for 2024, analysts say. YouTube Shorts now generates roughly 70 billion daily views.
In cloud computing, Google is still the third biggest service provider, behind Amazon.com and Microsoft. Like Amazon Web Services and Microsoft' Azure business, Google's cloud unit has upped capital spending targeting the new opportunity in generative AI.
Google's 2022 acquisition of cybersecurity firm Mandiant for $5.4 billion seems to be paying dividends. Mandiant is part of Google's cloud-based cybersecurity services.
There are bright spots in Alphabet's portfolio. 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.
Google Stock: Is It A Buy Or Sell Now?
Amid the 2024 gain of Google stock so far, whether the internet giant is a buy depends on fundamental and technical factors as well as each investor's own goals, strategy and risk tolerance.
Alphabet stock has turned in good and bad years recently. Shares jumped 65% in 2021 but in 2022 dropped 39%. Despite mounting competition in AI and internet search, Alphabet advanced 58% in 2023.
Also, the Relative Strength Rating of Google stock 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. The relative strength line has tumbled.
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 94 out of a best possible 99. The best growth stocks have a Composite Rating of 90 or better.
On MarketSurge, Google stock has an entry point of 182.02 from the cup-with-handle base. GOOGL stock is not actionable as of Nov. 15.
On the other hand, long-time holders could take profits.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
