Sign InSummary
On September 8, 2023, Alphabet Inc. (GOOG) closed at a near-peak range with a stock price of $137.20, but concerns over a major antitrust trial could impact future growth, categorizing the stock as a strong Hold until the legal implications become clearer.
Fundamental Analysis
Alphabet Inc., with the ticker symbol GOOG, is a NASDAQ-listed global tech giant with a colossal market cap of approximately $1.73 trillion. The company's most recently closed trading day on September 08, 2023, concluded with a stock price of $137.20, reflecting a 0.73% rise from its previous close. This marks a near-peak range for the company’s one-year performance, only slightly below the year's high of $138.58, and significantly above the year's low of $83.45.
The generated profit for each share stands at $4.71, while the price-to-earnings (P/E) ratio is 29.22, indicating the value assigned by the market for every dollar of earnings. This P/E ratio can appear high, reflecting either overvaluation or the market's expectations of high growth in the future.
An upcoming event that stockholders should be aware of is the earnings announcement, scheduled for 10/23/2023. Depending on the announced earnings, the stock price could see further fluctuation. The consensus among the analysts is a “Buy”, with 26 recommendations for buy and only 1 for hold. Also, the projected target median price for Alphabet's stock is $145.
Technical Analysis
The stock's Relative Strength Index (RSI14), a useful momentum indicator, stood at 74, which is close to the overbought threshold. A higher value on the RSI typically denotes a strong price momentum but may also imply some overvalued circumstances.
The 50-day moving average of the stock stands at $128.22, while the 200-day moving average is $109.82. Being above these thresholds demonstrates a strong bullish trend.
The Moving Average Convergence Divergence (MACD) at 1.22 also indicates bullishness. However, with the sizable upward movement in recent weeks, it would be prudent to watch for reversals, especially considering the established resistance level at $137.35. The stock's average true range (ATR), which measures market volatility, stands at 2.04, indicating reasonable volatility in the company's trading.
Notable News and Final Evaluation
The latest news seems to be a mix of positive and concerns. The affirmative updates include Google's long-term partnership with Nvidia, which is expected to last at least another decade, reflecting anticipated stability in Alphabet’s technological pipeline as it continues its advancement in AI. Furthermore, Google's integration with Airbnb’s board of directors suggests more strategic alliances and increased industry influence.
However, looming cloud above is the major antitrust trial against Google over the dominance of its search engine scheduled to begin on September 12, 2023. This case has the potential to reshape the internet search engine outlook and affect Google's market leadership. Earliest possible verdict might only be anticipated after weeks or months of trials and legal procedures.
Considering the current technical and fundamental analysis but also taking into account the legal context, Alphabet's stock can be categorized as a strong "Hold" until the results of the legal implications become clearer. Despite Alphabet's strong market position and financial performance, the antitrust lawsuit threat could potentially have a significant impact on GOOG's potential growth. It is advisable to closely watch for how these events unfold before making an investment decision.
In term of the immediate future, the stock may trade in the range of last closing price and identified resistance level, i.e., between $137.2 and $137.35 for the next trading day (September 11, 2023) barring any unexpected news. Considering the week ahead, in the absence of significant news impact and based on the discounted cash flow analysis, the price may attempt to approach DCF value of $139.30.
