Will Alphabet's Stock Keep Rising? Five Catalysts to Watch
During 2023, the Magnificent Seven, which includes $NVIDIA(NVDA.US$, $Meta Platforms(META.US$, $Microsoft(MSFT.US$, $Amazon(AMZN.US$, $Alphabet-C(GOOG.US$, $Apple(AAPL.US$, and $Tesla(TSLA.US$, all experienced gains of at least 49%. But after the first quarter of 2024, not every stock in this group has continued this upward trend.
The new Fab Four—Nvidia, Meta, Microsoft, and Amazon—continue to climb, surpassing the performance of the S&P 500 $S&P 500 Index(.SPX.US$. But with weakening demand, the estimates for Tesla and Apple have been progressively lowered, leading to respective declines in their stock prices of 30% and 12% since the start of the year.
Despite a poor start to the year, Alphabet has finally begun to rebound in the past month, attempting to join the leading group.
Will Alphabet advance to the forefront, or fall back with the two underachievers?
Headwinds in 2024
On 30 January, Alphabet released Q1 earnings, showing higher fourth-quarter revenue and profit than predicted, but its Ad revenue fell below analyst expectations. This resulted in Alphabet's stock dropping over 7% the day after the earnings announcement.
And in March, controversy surrounded Google concerning its Gemini-based gen AI chatbot, leading to a continued decline in its stock price.
Potential Catalysts
AI offers both new opportunities and challenges for Alphabet shares, and recently, market sentiment towards Alphabet has shown signs of improvement.
On 18 March, market sources reported that Apple is negotiating with Alphabet for a license to use its "Gemini" artificial intelligence training model on the iPhone, which led to a subsequent surge in Alphabet's stock price.
In the coming days, more news related to Alphabet is anticipated. These could serve as potential catalysts for movement in Alphabet's stock.
Some market experts hold a positive outlook on Alphabet’s stock value. "We are beginning to see signs of a reversal in sentiment emerging," observed analysts at Wedbush, as they increased its price target for Google shares to $175, up from $160.
Analysts at Jefferies are also optimistic about Alphabet, believing they have ample opportunities for faster growth. They have issued a Buy rating for Alphabet, along with a target price of $175.
Considering these upcoming AI events, do you believe these catalysts will be the spark to drive Alphabet's stock price higher?
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Sources: moomoo, WSJ, investors, CNBC, SeekingAlpha. Data as of 04/08/2024.
This presentation is for information and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. See this link for more information.
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