Google : Buy, Sell or Hold?

     Google seems to have lagged behind many of its Mag 7 counterparts in regaining lost ground during the Liberation Day crash. It has had a return of around 9% since the height (or low!) of Liberation Day, while Nvidia and Meta are almost back to pre-tariff levels, having regained 30% and 27% since Liberation Day. 

    Yet many of its fundamentals remain strong : 30% profit margins, slightly undervalued when looking at EPS and P/E and good growth prospects on AI and cloud infrastructure (cloud infrastructure's share of Google's revenue has been growing), all the more so with its heavy investments into R&D. However, Google's current bearish nature might be of concern : even with Google's solid earnings the stock took a hit, continuing its downward trend since February. 

    Let's take a closer look at Alphabet's most recent earnings : revenue has surged : 28% increase on cloud revenue and 10% increase on services revenue (Google services are primarily its search engine and ads). Its impressive how Google has managed to maintain stable profits and YoY growth even under the threat of Trump tariffs. This resilience to Trump's threats certainly makes out Google a good prospect for wary investors who want to be protected from the President's erratic natures.

    However, it is important to not forget Google's weaknesses. Antitrust lawsuits plague the company in Europe and the US alike, where the company is taking a heavy hit through hefty fines. Although its R&D is promising, it invests heavily into programs which show little potential for profits, such as Waymo, possibly showing dwindling prospects for future ventures. Furthermore, Google relies heavily on ads on its search engine and YouTube, which make up over 70% of its revenue. As new minor players move into the internet services sector, Google could take a hit.

    Although these risks must be noted, Google is selling at an attractive price right now : the cheapest of the Mag 7 companies, Google is an entrenched brand with clear recognition and stable leadership. It is definitely a stock to watch, and after the tariff relief frenzy dies down, Google may be on sale. It certainly could have a place in the StocksIQ portfolio soon. Its current bearish nature might be incentive for investors to hold back on buying until further clarity emerges or Google stock begins to strongly catch up to its counterparts.

DJI +2.44% ; SPX +2.32% ; IXIC +3.4% ; AAPL +6.3% ; MSFT +2.1% ; GOOGL +3.9% ; AMZN +8.4% ; NVDA +5.1% ; META +7.8% ; TSLA +6.5%

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