Alphabet (GOOGL) investors appear to be betting that strong second-quarter earnings will outweigh concerns about a major antitrust ruling that is expected by August, according to Bloomberg. Indeed, the Justice Department is considering breaking up the tech giant’s internet search business, but some experts say that if Alphabet meets growth expectations, the stock could still be a smart buy. As a result, shares have been rallying into earnings, and if the stock closes higher today, it would be the 10th straight day of gains, something it hasn’t done since 2010.
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It is worth noting that for the upcoming quarter, analysts expect Alphabet to report $2.18 per share in earnings and nearly $94 billion in revenue, which are increases of 15% and 11%, respectively, from last year. In addition, this growth trend is projected to continue until 2028. Still, Alphabet is trailing behind competitors like Meta (META) and the Nasdaq 100 Index (QQQ) this year, partly because investors are worried that AI tools like ChatGPT could threaten Google’s dominance in the search market.
The antitrust case is also a big concern. In fact, the Justice Department wants Google to sell its Chrome browser and stop paying companies like Apple (AAPL) to be the default search engine on its devices. Nevertheless, Alphabet is expected to benefit from the rise of AI, especially in its cloud business, which recently signed a deal with OpenAI to provide it with more computing power. Moreover, GOOGL stock is trading at just 18 times estimated earnings, making it the cheapest among the top tech giants.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 30 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $205.71 per share implies 8.5% upside potential.
