Sign InAlphabet Inc. Positioned for Growth Amidst Bull Market Surge; Short-term Turbulence Expected
Summary
As of the date of analysis, Alphabet Inc. (GOOG) is in a solid position for potential growth, supported by its strong earnings, high trading volume, and optimistic industry sentiment, but the currently bearish trend and trading below moving averages could lead to short-term price depression; therefore, it is rated as a Hold until the upcoming earnings announcement provides more clarity on its future outlook.
Fundamental Analysis
Alphabet Inc. (GOOG) has a market capitalization of $1.53 trillion with a high volume of trading at 55.49 million, more than double the average volume of 25.92 million shares. This uptick in volume indicates increased interest and activity in the stock.
The company has a solid earnings per share (EPS) of $4.39 and a price-earning (PE) ratio of 27.41, indicating that the company is moderately valued when compared to other stocks in the market.
Relevant news affecting Alphabet Inc. reveals strong momentum for big tech stocks such as Google. The return of co-founder Sergey Brin to work on the firm's new AI project denotes a positive fundamental outlook. Furthermore, the company's pledge to make AI safer and secure along with other tech giants confirms their commitment to responsible technological advancements and practices.
Additionally, Alphabet is suggested as one of the five stocks to consider in the new bull market, backed by its strong net cash position, significant free cash flow, and potential for substantial growth.
Technical Analysis
Alphabet's Relative Strength Index (RSI14) stands at 49, which suggests that the stock is neither overbought nor oversold. The Moving Average Convergence Divergence (MACD) for the last 3 months is -1.10, suggesting that the stock is currently on a bearish trend.
Moreover, as per the latest close, the stock is trading below both its 50-day moving average of $121.94 and 200-day moving average of $103.78, showcasing a downward trend. This is further confirmed by the latest closing price of $120.31, which is lower than both its price high ($121.30) and year high ($129.55).
Stock Price Prediction
With an upcoming earnings announcement on July 24, 2023, Alphabet's stock will likely see significant trading activity. The discounted cash flow (DCF) estimates the stock price to be $121.97, slightly higher than the current price.
Taking into account the above factors, the consensus target for Alphabet's stock price is given as $148.12, with a high estimate of $312 and a low estimate of $115.
Final Evaluation and Rating
Combining both fundamental and technical analysis, Alphabet Inc. (ticker: GOOG) appears to be in a solid position for potential growth, supported by its strong earnings, high trading volume and optimistic industry sentiment. However, the currently bearish trend and the fact that the stock is trading beneath its moving averages could lead to short-term price depression.
Therefore, considering the future growth prospects, the long-term outlook of Alphabet Inc. remains positive, despite the potential for short-term turbulence. Thus, Alphabet is rated as a "Hold" until the earnings announcement adds more clarity. After the earnings announcement, investors should reassess based on Alphabet's future earnings outlook.
