Alphabet's stock has been performing well, climbing 7.8% in January and outperforming the Nasdaq 100 Index since the start of 2024. The company's core businesses, such as Google Search and Google Cloud, continue to drive revenue, while other ventures like YouTube and Waymo are seen as significant value sources. Analysts suggest that Alphabet's focus on artificial intelligence and its strong position in the ad market make it less susceptible to tariff risks compared to hardware-focused tech firms.
Key takeaways:
- Alphabet is considered a bargain among megacap tech firms, trading at less than 22 times estimated earnings, despite geopolitical uncertainties.
- China has announced a probe into Alphabet's Google for alleged antitrust violations, focusing on the market dominance of Google's Android operating system in China.
- Alphabet's revenue growth is expected to accelerate to 17.8% next year, with net earnings growing 12% in 2025, driven by strong performance in search advertising and cloud services.
- High-margin businesses like cloud and YouTube are seen as "shock absorbers" against potential volatility from geopolitical tensions and tariff risks.