Latest news with #GOOGL
Yahoo
8 hours ago
- Business
- Yahoo
Alphabet stock could fall as much as 25% in 'black swan event' if judge orders Google Chrome divestiture
Alphabet (GOOG, GOOGL) stock could drop between 15% and 25% if US District Judge Amit Mehta orders Google to sell off its Chrome browser, Barclays analysts wrote in a note to investors Monday. In August 2024, Google lost a landmark antitrust trial against the US Department of Justice. Judge Mehta found the tech giant guilty of monopolizing the search engine market — specifically, the markets for "general search" and "general search text" ads, which are ones that appear at the top of the search results page, Yahoo Finance's Alexis Keenan reported. Last Friday, Google and the Department of Justice wrapped up closing arguments in the remedies phase of the case. The Department of Justice argued that Mehta should force Google to divest its web browser, Chrome, and share its search data with rivals as well as ban its exclusivity agreements that secure Google as the default search engine on mobile devices and browsers, Keenan and Yahoo Finance's Dan Howley reported. Barclays analyst Ross Sandler wrote in a Monday note that 'the probability of a Chrome divestiture, while low, has increased in our view,' following the closing arguments, adding that 'the most likely candidates' to buy Chrome would be 'well funded AI companies like OpenAI, Anthropic or perhaps Perplexity.' Sandler said such an outcome would be 'a major blow' to Google, given that Chrome has 4 billion users and represents 35% of Google's search revenue. 'This would be a major development, a black swan event for GOOGL shares,' he said. 'Shares would obviously trade off significantly if this were to play out as no investors we speak to are thinking this remedy plays out.' Sandler said a Chrome divestiture would not only cause Alphabet stock to tumble as much as 25% but would also result in a potential 30% hit to Alphabet's earnings per share. 'The reality is we don't know what the court is going to decide on remedies, we listened to the entire day of closing arguments and there were certainly times where we felt a lot worse than we did prior, and other times where we felt better (in terms of GOOGL stock price impact),' Sandler said. He holds an Overweight rating on the stock. Mehta is expected to decide on a remedy in the case — and the fate of Google's search empire — in August. Google said Saturday that it will appeal the case. Separately on Monday, Alphabet said it agreed to spend $500 million to change its compliance structure in order to settle a case with shareholders accusing the company of antitrust violations. Alphabet stock fell 1.5% on Monday, and shares are down 10.6% year to date. Read more about "Magnificent Seven" stock moves and today's market action. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
8 hours ago
- Business
- Yahoo
Alphabet stock could fall as much as 25% in 'black swan event' if judge orders Google Chrome divestiture
Alphabet (GOOG, GOOGL) stock could drop between 15% and 25% if US District Judge Amit Mehta orders Google to sell off its Chrome browser, Barclays analysts wrote in a note to investors Monday. In August 2024, Google lost a landmark antitrust trial against the US Department of Justice. Judge Mehta found the tech giant guilty of monopolizing the search engine market — specifically, the markets for "general search" and "general search text" ads, which are ones that appear at the top of the search results page, Yahoo Finance's Alexis Keenan reported. Last Friday, Google and the Department of Justice wrapped up closing arguments in the remedies phase of the case. The Department of Justice argued that Mehta should force Google to divest its web browser, Chrome, and share its search data with rivals as well as ban its exclusivity agreements that secure Google as the default search engine on mobile devices and browsers, Keenan and Yahoo Finance's Dan Howley reported. Barclays analyst Ross Sandler wrote in a Monday note that 'the probability of a Chrome divestiture, while low, has increased in our view,' following the closing arguments, adding that 'the most likely candidates' to buy Chrome would be 'well funded AI companies like OpenAI, Anthropic or perhaps Perplexity.' Sandler said such an outcome would be 'a major blow' to Google, given that Chrome has 4 billion users and represents 35% of Google's search revenue. 'This would be a major development, a black swan event for GOOGL shares,' he said. 'Shares would obviously trade off significantly if this were to play out as no investors we speak to are thinking this remedy plays out.' Sandler said a Chrome divestiture would not only cause Alphabet stock to tumble as much as 25% but would also result in a potential 30% hit to Alphabet's earnings per share. 'The reality is we don't know what the court is going to decide on remedies, we listened to the entire day of closing arguments and there were certainly times where we felt a lot worse than we did prior, and other times where we felt better (in terms of GOOGL stock price impact),' Sandler said. He holds an Overweight rating on the stock. Mehta is expected to decide on a remedy in the case — and the fate of Google's search empire — in August. Google said Saturday that it will appeal the case. Separately on Monday, Alphabet said it agreed to spend $500 million to change its compliance structure in order to settle a case with shareholders accusing the company of antitrust violations. Alphabet stock fell 1.5% on Monday, and shares are down 10.6% year to date. Read more about "Magnificent Seven" stock moves and today's market action. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
2 days ago
- Business
- Globe and Mail
Down 16%, Should You Buy the Dip on Alphabet?
By zooming out, it becomes obvious that Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) has been a huge winner for investors. Shares have surged 144% in the past five years, and they're up an impressive 525% just in the last decade. Becoming a dominant internet enterprise has resulted in some very happy shareholders. But as of this writing on May 28, this top technology stock trades 16% below its high, which was reached on Feb. 4. Should you take advantage of the market's pessimism and buy the dip on Alphabet right now? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Is AI a risk or an opportunity? With the proliferation of generative artificial intelligence (AI) tools in recent years, investors have rightfully been concerned that Alphabet's crown jewel, Google Search, that represented 56% of sales in the first quarter, would be disrupted. That's because it's believed that users would turn more to AI when seeking out information on a variety of topics, pulling traffic away from Google Search. In turn, this could negatively impact advertising revenue. So far, it appears these fears are overblown. First off, Google Search still commands a whopping 90% of global market share when it comes to search engines. Additionally, Google Search saw revenue increase 10% year over year in Q1. And that $50.7 billion sales figure is up 28% from the same period three years ago. Lastly, it's worth pointing out that Alphabet isn't resting on its laurels. The company has clearly made AI a top priority. At its annual Google I/O developer conference in May, Alphabet did not disappoint. A notable 100 updates were announced, with new AI features coming across the board. Alphabet is already finding ways to make money from AI. "For AI Overviews, overall, we continue to see monetization at approximately the same rate," Chief Business Officer Philipp Schindler said on the Q1 2025 earnings call when comparing Overviews to traditional search. And when it comes to advertising customers, AI is helping them create more effective marketing campaigns that can increase return on spend and enhance targeting capabilities. In Q1, Alphabet generated $34.5 billion in net income. This puts it in an enviable position to keep plowing sizable financial resources into AI initiatives to bolster its competitive standing. Alphabet's economic moat Alphabet's wide economic moat is a key factor that highlights just how outstanding of a business this really is. The company benefits from powerful network effects within Search and YouTube. There are invaluable, intangible assets at play, like the Alphabet and Google brands, unrivaled technological know-how, and the ability to collect unbelievable amounts of data that can directly impact strategic decisions. There is also a cost advantage, particularly with Google Cloud. The platform requires huge fixed costs to build out the infrastructure. This explains why the segment was unprofitable for a long time. However, now that revenue has scaled up to $49 billion on an annualized run-rate in Q1, Google Cloud is boosting the bottom line. Operating income totaled $2.2 billion in the first three months of 2025. Google Cloud's customers also deal with high switching costs. Once they onboard and start to depend on Alphabet as its mission-critical IT partner, it makes sense why they would be inclined to stay put unless they want to cause potential operational disruptions. Trading at a discount to the market Investors will notice that Alphabet's valuation is too hard to ignore. Shares trade at a price-to-earnings (P/E) ratio of 19.2. This is a discount to the S&P 500 Index, which just doesn't seem warranted given the quality of this business. And of all the " Magnificent Seven" stocks, Alphabet is the cheapest. Finding such a great deal in the stock market can make investors think that they're overlooking something. However, it's best not to overanalyze the situation. Alphabet is a smart buy while on the dip. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Globe and Mail
3 days ago
- Business
- Globe and Mail
4 Reasons to Buy Alphabet Stock Like There's No Tomorrow
One stock that divides many investors at this time is Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG). A big reason some investors are bearish on the name is that they believe artificial intelligence (AI) will disrupt its highly profitable search business. While certainly a risk, I don't think that is going to happen. Let's look at four reasons why I'm bullish on the stock to the point where I would recommend buying it like there is no tomorrow. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » 1. Alphabet has search advantages and opportunities AI is potentially one of the biggest technological advancements of our generation. However, while it is very good at many things, there is good reason to believe that AI chatbots won't replace search. Cost is one main issue. Running AI queries is much more costly than search queries, which is why there are often limits placed on the number of queries someone can run, and paid tiers. Investors recently got a peek into the amount of money that AI search start-up Perplexity AI is losing for trial users and users on its free tier, as the company spends heavily on third-party AI models and cloud c omputing services. Meanwhile, OpenAI said that it loses money on its $200-per-month ChatGPT Pro plan. In addition, there will continue to be a large number of people who will not spend money on AI and prefer free, ad-supported search. And when it comes to ad-supported search, whether it be powered by AI or regular search, Google has established a wide moat through its distribution and ad network advantages. The company's search engine is preinstalled and the default engine for billions of devices. Its Android operating system has about a 70% market share in the smartphone market, while its Chrome browser has a 66% market share. Both use Google as their default search engine. Meanwhile, it has a revenue-sharing deal with Apple to be the default search engine on its devices through Safari, which helps it capture much of the rest of the market. It even has revenue-share deals with other browsers, such as Opera, to be their search engine. At the same time, Alphabet has created one of the largest ad networks on the planet. Early on, the company built up its ability to serve local markets through location-based ad targeting and letting local businesses create free listings to improve their presence on search. Meanwhile, its self-service platform makes it easy for local businesses to run campaigns themselves. With a huge user base, Alphabet can connect advertisers with consumers on everything from a global to a local level. Typically, for a search query to be monetized, there must be some form of commercial intent, which is why Google has historically only displayed ads on about 20% of searches. This also highlights the significance of Alphabet's latest AI-powered search updates. With the launch of its new AI mode, the company added several commerce-focused features aimed at enhancing monetization. One standout is "Shop by AI," which allows users to find products simply by describing them, virtually try on clothes using a photo, and even track prices. Google also introduced generative AI capabilities that can perform tasks like finding the best ticket deals across platforms from sites such as Ticketmaster and StubHub. These innovations could help drive new ad opportunities over time. Between Google's unmatched distribution, massive ad network, strong data advantage, and the growing strength of its Gemini AI model -- not to mention its renewed focus on commerce -- I see AI as more of a long-term opportunity for Alphabet than a threat. 2. Google Cloud is driving Alphabet's growth these days While much of the investor focus has been on Google search, Alphabet's cloud computing unit, Google Cloud, has been a strong growth driver for the company. Cloud computing is a high-fixed-cost business, and Google Cloud has recently gained enough scale to cover its fixed costs, hitting a profitability inflection point. This was seen in its results in the first quarter of 2025, where the unit grew its revenue 28% year over year to $12.3 billion, while its segment operating income soared 142% to $2.2 billion. Google Cloud is seeing momentum as customers use its Gemini foundational models to build and customize their own AI tools, then run those workloads on its infrastructure. Its Vertex AI platform, meanwhile, makes it easier for organizations to build, deploy, and manage models all in one place. At the same time, Google Cloud continues to lean into its strengths in data analytics with tools like BigQuery and its leadership in Kubernetes, which are software packages that bundle apps with everything they need to run. Alphabet is investing heavily in data center infrastructure to keep up with demand, and this should be a strong, growing business in the year ahead. Meanwhile, the company has a cost advantage through the development of its own custom AI chips that consume less power, lowering its cost of ownership over time. 3. Waymo has a first-mover advantage Another big potential growth driver for Alphabet that should not be overlooked is its Waymo robotaxi business. The company has gotten a big first-mover advantage in the U.S. and has started to see rapid growth as it expands to more cities. Meanwhile, it has recently teamed up with Uber Technologies in a few cities to gain access to its large distribution platform and for help with fleet management services, such as cleaning, maintenance, and charging its vehicles. Waymo is now providing over 250,000 paid robotaxi rides per week, and Uber reported that in Austin, Texas, Waymo vehicles were busier than 99% of its human drivers in the city, based on trips per day. As the technology gains traction, it's likely that adoption in new cities will accelerate even faster. Alphabet will still likely need to lower the costs of its technology for this business to become profitable, but it is a huge opportunity. 4. Alphabet currently sports a cheap valuation With investors seemingly unable to see the forest for the trees of late, Alphabet has been left with a very cheap valuation. The stock currently trades at a forward price-to-earnings ratio of 18 times based on analysts' estimates for 2025. For a company with a strong collection of market-leading and emerging growth businesses, that valuation is just too cheap. Alphabet is one of the least expensive megacap tech stocks tied to AI, and this is a great time to pick up shares on the cheap. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Business Insider
3 days ago
- Business
- Business Insider
NVDA, TSLA, GOOGL: U.S. Stocks Post Best May Performance Since 1990
There's a saying on Wall Street called 'sell in May and go away' that refers to the tendency for equities to decline during the month. But not this year. Confident Investing Starts Here: As May 2025 draws to a close, the S&P 500 index is on pace for its best monthly performance since 2023. The benchmark index is also on track for its biggest gains during the month of May since 1990, according to Dow Jones Market Data. On the last trading day of the month, the S&P 500 is up 6% this May after plunging nearly 20% in April as U.S. President Donald Trump unveiled his tariff policies. Other U.S. indices also registered strong gains during May 2025, with the Nasdaq Composite index gaining nearly 10% as major technology names such as Nvidia (NVDA), Tesla (TSLA), and Alphabet (GOOGL) rebounded strongly from their April lows. NVDA and TSLA stocks each rose more than 20% in the month. The blue-chip Dow Jones Industrial Average increased 4% in May of this year. For U.S. equities, May has represented a big turnaround after the S&P 500 declined for three consecutive months. As President Trump eased many of his tariffs and entered into trade negotiations with different countries, including China, it has injected renewed confidence into the markets, say analysts. At the same time, economic data out of the U.S. has remained strong and showed signs of resilience. On May 30, the last trading day of the month, data showed that U.S. inflation declined to an annualized rate of 2.1% in April, lower than the consensus expectation of economists. Is GOOGL Stock a Buy? The stock of Alphabet has a consensus Strong Buy rating among 38 Wall Street analysts. That rating is based on 29 Buy and nine Hold recommendations issued in the last three months. The average GOOGL price target of $199.14 implies 17.31% upside from current levels.
