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Headquartered in Mountain View, California, Alphabet Inc. (GOOG) is a global technology conglomerate renowned for its search and advertising innovations. Valued at $2.14 trillion by market cap, Alphabet is known for its pioneering contributions to digital advertising, cloud computing, and cutting-edge artificial intelligence. Its flagship subsidiary, Google, has revolutionized how people access and interact with information online.
Shares of the mega-cap tech company significantly outperformed the broader market over the past year. The stock has gained 30.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 20.5%. In 2024 alone, the stock has gained 22.9%, compared to SPX's 15.8% gains on a YTD basis.
Narrowing the focus, GOOG’s outperformance is also evident compared to the Invesco NASDAQ Internet ETF (PNQI). The exchange-traded fund has gained 20.3% over this period. Also, the stock's YTD gains outshine the ETF’s 11.1% returns over the same time frame.
Alphabet's stock fell after OpenAI announced a potential competitor to Google's search engine, but Google's dominant market position and extensive ecosystem are expected to help it maintain its lead. On Jul. 23, GOOG reported its Q2 earnings, beating Wall Street’s expectations for revenue and EPS. The company raised the low end of its full-year earnings forecast. However, following the release of these results, the stock declined by over 5% in the next trading session.
For the current fiscal year, ending in December, analysts expect GOOG’s EPS to grow 31.4% to $7.62 on a diluted basis. The company's earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 44 analysts covering GOOG stock, the consensus rating is a “Strong Buy.” That’s based on 34 “Strong Buy” ratings, three “Moderate Buys,” and seven “Holds.”
This configuration is slightly less bullish than three months ago, with 35 suggesting a “Strong Buy.”
On Jul. 25, CMB International Securities analyst Saiyi HE maintained a ‘Buy’ rating on Alphabet Class C with a price target of $218, implying a potential upside of 25.9% from current levels.
The mean price target of $203.46 represents a 17.5% premium to GOOG’s current price levels. The Street-high price target of $240 suggests an upside potential of 38.6%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
