GOOG Stock Analysis: Why Right Now Is the Best Time to Buy Alphabet

Stocks to buy

As far as recent earnings are concerned, Q4 2023 looked impressive for the advertising giant Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). The company reported strong 13% revenue growth, with advertising revenues expected to climb further in 2024, driven by events like the Olympics and Elections. While ads dominate, Google Cloud’s revenue surged from $7.3 billion to $9.2 billion year-over-year, remaining highly profitable and the key to most investors’ bullish thesis for this stock. This sums up my GOOG stock analysis.

Notably, Alphabet continues to invest in “Other bets,” high-growth ventures with future potential. With shares up 57% in a year and 167% in five years, Alphabet remains a favored long-term stock. Here’s why investors may want to consider GOOG stock at this current juncture in the market.

Bard to Gemini AI

Google rebranded its Bard chatbot as Gemini and introduced Gemini Advanced, its largest language model. Initially, Gemini came in Nano, Pro, and Ultra sizes. Ultra, now Gemini Advanced, underwent rigorous testing. CEO Sundar Pichai highlighted its capabilities, including outperforming human experts in multitask language understanding.

Pichai also mentioned that Gemini models would integrate into Google’s Duet AI features, including Workspace and Google Cloud. Duet AI in Workspace will transition to Gemini for Workspace, while Google Cloud’s coding assistant will also rebrand. Additionally, Google introduced new mobile access methods for Gemini on Android and iOS. 

Google intensified AI competition with Gemini 1.5, a cutting-edge large language model. It’s a multi-modal AI, that processes various data types like text, images, audio, and video. Released after Gemini 1, it promises significant advancements.

Impressive Business Model Continues

Alphabet’s growth is significant and impressive, and the key factor driving this growth is the company’s excellent business model. Alphabet has seen some challenges due to regulatory pressures, economic factors, and competition from its rivals. It expanded subscription services, Play Store, hardware, and cloud platform to diversify.

Alphabet’s current valuation at 22 times forward earnings suggests modest potential. Sustaining a 22% EPS growth for 20 years could yield $1 million from a $20,000 investment. This is a central part of my GOOG stock analysis.

Alphabet, Google’s parent company, renamed its AI chatbot from Bard to align with its large-language learning models. Alongside the rebrand, it introduced a mobile version and a premium subscription, “Gemini Advanced,” priced at $19.99 monthly, featuring cloud storage. 

The company aims to monetize its AI advancements, integrating them into its office suite and boosting GOOGL stock, which surged 53% over a year, delivering substantial returns for early investors.

A Good Bet

Alphabet’s shares rose 1% year-to-date, contrasting Amazon’s 10% gain. However, a dip followed its Q4 earnings release, missing revenue expectations by $420 million in Google’s ad business. Rumors of OpenAI’s potential search tool further impacted stock prices. 

Despite setbacks, Alphabet exceeded Q4 revenue estimates by $1 billion, driven by Google Cloud’s 26% revenue growth to $9 billion and operating income of $864 million. Alphabet remains promising, with a dominant search engine market share and robust AI investment. This concludes my GOOG stock analysis.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Articles You May Like

3 Restaurant Stocks to Buy Now: Q2 Edition
Wall Street Favorites: 3 Auto Stocks With Strong Buy Ratings for April 2024
Jump on the Reddit Bandwagon? Unpacking the RDDT Stock Buzz.
3 Must-Own Stocks to Buy for Under $5 Before They Blast Off
7 Top Stocks Under $7