Shares of Alphabet (GOOGL) are in the green today, even though investment firm Wedbush removed the tech company from its Best Ideas List. Interestingly, the analysts, led by five-star analyst Scott Devitt, said that they still believe Alphabet is a good long-term investment. However, they explained that the growing uncertainty about how artificial intelligence could affect its business has made the stock more volatile. Because of this, they decided it no longer fits in their list of top picks.
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Wedbush also noted that AI has created new risks for Alphabet’s search and advertising business. Indeed, although they believe that Alphabet can adapt and succeed over time, they said it might take a while for the company to prove that to investors. In the meantime, this uncertainty could cause the stock to trade below what the firm thinks is fair value, which it currently estimates at $220 per share, even if the company’s future remains strong.
This move by Wedbush came shortly after Alphabet’s stock dropped due to comments made by Apple (AAPL) executive Eddy Cue. In fact, Cue said that there had been a recent decline in Google searches on Apple’s Safari browser. In response, Alphabet said that overall searches, including those from Apple devices, are still growing. Still, the situation shows how nervous investors are about any changes in search behavior as Alphabet faces more competition in the AI space.
Is Google Stock a Good Buy?
Overall, analysts have a Strong Buy consensus rating on GOOGL stock based on 28 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $197.69 per share implies 26% upside potential from current levels.
