Alphabet (NASDAQ:GOOGL) is now facing scrutiny from the Federal Trade Commission (FTC), receiving a compulsory order as part of an investigation into potential antitrust issues. Under President Biden’s administration, the FTC has lowered the bar for investigating market power, targeting partnerships between GenAI developers and cloud giants like Alphabet to assess their impact on competition.
However, a shift is anticipated on January 20th, as the incoming Trump Administration is expected to adopt a more flexible regulatory approach. As such, top investor Steven Fiorillo believes that the victory of the once and future president is a promising development for Alphabet.
“The Trump Administration’s return is expected to ease antitrust pressures, fostering a favorable environment for GOOGL’s growth and innovation,” claims the 5-star investor, ranked in the top 1% of TipRanks’ stock experts.
Fiorillo firmly believes that the incoming administration will be much friendlier to the tech titans of industry, especially with ringleader Elon Musk holding a spot in Trump’s inner circle. The investor expects Trump to remove the current FTC Chair Lina Khan and ease off on the inquiries, enabling GOOGL and its peers to “focus on innovation without worrying about triggering investigations into potential antitrust actions.”
Beyond the changing political winds, Fiorillo is bullish about GOOGL’s underlying business case. The investor dismisses concerns about ChatGPT eating into the company’s search engine profits, observing that Google Search grew revenues by 12.17% year-over-year to $43.39 billion in Q3.
“GOOGL’s moat is still there,” argues Fiorillo, adding that “for a company that is supposed to be on the decline, its business metrics are very strong.”
The investor also highlights Alphabet’s “extremely undervalued” position, with forward earnings multiples of 22.24x for 2024 and 17.52x for 2026 – the lowest valuations among the ‘Magnificent Seven’ tech giants.
Looking forward, the investor posits that GOOGL’s massive capex expenditures in AI and “aggressive share buybacks” should lead to shareholder gains far into the future.
“When I look out to 2025 and beyond, I think that GOOGL is in a fantastic position,” Fiorillo concludes, affirming his Strong Buy rating on the stock. (To watch Fiorillo’s track record, click here)
Fiorillo’s upbeat assessment is reflected among Wall Street analysts. With 27 Buy and 7 Hold ratings, GOOGL boasts a Strong Buy consensus rating. Its 12-month average price target of $207.75 implies potential gains of ~14% for the next 12 months. (See GOOGL stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
