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Publication date: January 2, 2025
In recent weeks, you may have noticed; that analysts are tumbling over each other to proclaim to anyone who will hear that Alphabet will be the stock of 2025. This is another interesting reason for us to analyze this company and its stock price in more detail to determine our opinion of this company. De uitkomst is enigszins verrassend!
First, a closer introduction
Alphabet Inc. Is the parent company of Google and was founded on Oct. 2, 2015. It was done as part of a restructuring of Google, establishing Alphabet as an umbrella conglomerate. Alphabet includes the extremely well-known Google and other subsidiaries, such as the lesser-known Waymo, DeepMind, and Verily.
This restructuring was intended to better organize and manage Google's various operations so that innovative projects and core businesses could each receive greater focus.
Google itself was founded back on Sept. 4, 1998, by Larry Page and Sergey Brin. The company began as a research project at Stanford University, where the two founders developed a search engine that ranked Web pages based on their relevance and popularity.
The company's original name was Google.
The original name of the search engine, by the way, was Backrub, but this was later changed to Google, a pun on "googol," which refers to the number 1 followed by 100 zeros. This reflected their mission to organize and make accessible vast amounts of information on the Internet.
What is the current situation at Alphabet?
Alphabet Inc. has recently made significant advances in artificial intelligence (AI) and quantum computing. The company unveiled a next-generation quantum chip called "Willow," which is capable of solving complex problems in as little as five minutes task that for classical computers would take longer than the age of the universe. This breakthrough led to a rise of about 5% in Alphabet's share price.
Despite these technological advances, Alphabet faces legal challenges. In August 2024, the company was found guilty of violating antitrust laws by a U.S. district court, marking the first antitrust ruling against a U.S. company in 24 years. Alphabet has appealed the ruling.
Financially, Alphabet continues to perform strongly. In the third quarter of 2024, the company exceeded market expectations with higher revenue and earnings.
In summary, Alphabet continues to lead in technological innovations, particularly in AI and quantum computing, while facing legal challenges and continuing to meet financial expectations.
Alphabet Inc, the parent company of Google, had about 181,269 employees worldwide as of Sept. 30, 2024.
What is Alphabet's analyst expectation?
For 2024, analysts are counting on a 12.7% increase in revenue to $346 billion and then an increase of more than 10% to $380 billion in 2025. With improving margins, analysts anticipate an increase in net profit to $93.6 billion, up from $73.8 billion in 2023.
For the current fiscal year 2024, Alphabet is expected to release its annual results in late January/early February 2025. This is not clear at the time of writing but the expectation runs from Jan. 30 to Feb. 4.
Analysts are generally positive about Alphabet Inc. According to data from Stock Analysis, 41 analysts have rated the stock with an average rating of "Strong Buy," indicating that they expect the stock to significantly outperform the market shortly. The average price target is around $207.51. The current share price is around $190.
In addition, several analysts have recently raised their price targets and reiterated buy recommendations. For example, JPMorgan raised its price target for Alphabet to $212, citing confidence in Google's AI initiatives and the strong performance of its Cloud division.
In sum, fundamental analysts remain mostly optimistic about Alphabet's prospects, particularly because of its strength in search advertising and Cloud services, despite existing competitive and regulatory challenges.
Technical analysts currently rate Alphabet Inc. in a bullish trend in both the medium and long term, suggesting continued upside. Key resistance levels lie around $197, while support is found at around $182. A breakout above resistance may signal further price gains, while a drop below support may indicate a possible trend reversal.
Conclusion
As we indicated at the beginning of this article, we believe the company has a bright future and we should expect sharply higher prices in a two-year time frame. Currently, based on the short-term algorithm, we are less enthusiastic.
Below is Alphabet's chart over the past 5 years. You can see the nice upward trend that has given the stock a return of about 170% over the past 5 years. Currently, the stock price is facing a challenge. The price of around $195 is a barrier and could fall back to $150 even with a slight setback in the market. At that level, fantastic buying opportunities arise as the price target for mid-2026 is around $225.
We expect some challenges for Alphabet in the first half of the year that could cause the stock price to fall back from $190 to $172 and even to $150. At those times, it is worth considering putting the stock in your portfolio because the price is on the eve of another sprint to
$225.
With that, we agree with the many experts who see Alphabet's share price rising. However, for the moment, we will stay on the sidelines for a while and not run after the mob. We will wait a while until the optimal buying opportunity arises.
Just be patient and good luck.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. Therefore, they are for educational purposes only.
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