Alphabet Cl A
Alphabet Cl A
GOOGL
$7.28
4.15%
235%
IBD Stock Analysis
- Stock breaking out of cup-with-handle base
- Relative strength line rising, but well off highs
Industry Group Ranking
Emerging Pattern
Cup with Handle
* Not real-time data. All data shown was captured at
12:16PM EST on
12/10/2024.
Google-parent Alphabet (GOOGL) is the IBD Stock of the Day as the company flexes its technology prowess with a new quantum computing chip. Google stock has been pressured by rising internet search competition. Heading into 2025, however, Waymo and YouTube could have upside.
On the stock market today, Google stock climbed more than 5% to 184.64. Google has gained 31% in 2024. Still, most of the Magnificent Seven have done a lot better than Alphabet.
IBD on Tuesday added Google stock to SwingTrader and Leaderboard.
Google stock forged a cup-and-handle base with an entry point of 182.49.
‘Willow’ Quantum Chip Could Lift Google Stock
On Tuesday, Google stock pushed into a buy zone amid the announcement of the Willow quantum computing chip. Google has been a leader in quantum research. But quantum technology has faced challenges.
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Advances in quantum computing are expected to surpass today’s electronic-chip-based supercomputers. Quantum computing works on a subatomic level and uses exotic technologies, like supercold superconductor chips. Quantum computing’s ultimate benefit is that it solves problems too complex for today’s classical computers.
Google stock hit an all-time high of 191.75 on July 10. Shares have ping-ponged since July after they hit an all-time high.
The impact of generative artificial intelligence on the internet search advertising business of Alphabet remains a key issue for investors. Also, antitrust lawsuits filed by the Department of Justice have pressured Google stock.
Waymo Expansion
On the other hand, Google continues to create advanced technologies. Waymo is widely viewed as the leader in autonomous vehicles.
Meanwhile, Waymo on Dec. 5 announced that the company plans to expand its autonomous-vehicle rideshare service to Miami in 2026. The Waymo One robotaxi service currently operates in Phoenix, San Francisco and Los Angeles, with upcoming service already planned for Austin, Texas, and Atlanta. In Miami, Waymo will compete with Uber Technologies (UBER) and other rideshare services. In Austin and Atlanta, Waymo is partnering with Uber.
Meanwhile, Waymo also disclosed that it has reached 150,000 trips per week, representing rapid growth from August’s 100,00 per week. In October, Waymo closed a $5.6 billion funding round, including from Google and previous investors. If Wall Street analysts start including Waymo in Alphabet’s valuation, it would be a big development.
One wild card heading into 2025 is the status of YouTube rival TikTok. An appeals court upheld a federal law requiring TikTok to shed its Chinese ownership or be banned in the U.S. The decision relied on warnings from U.S. officials that the Chinese government can require ByteDance, the app’s Beijing-based parent company, to provide access to U.S. users’ data.
If TikTok is banned next year in the U.S., there’s limited upside for Google and YouTube, said a Deutsche Bank report.
“YouTube would generate an additional $921 million in revenue for every 10% of TikTok’s minutes that are reallocated towards YouTube’s daily active users,” said Deutsche Bank analyst Benjamin Black in a report.
In 2025, developments in the artificial intelligence landscape will be key for investors. Generative AI startup OpenAI’s ChatGPT continues to gain market share. ChatGPT delivers answers to search queries, while Google’s business model has been based on providing web links. Startup Perplexity is another new rival.
AI Overviews Ramps Up For Google Stock
Google began deploying AI Overviews in the U.S. in mid-May, with conversational summaries topping links for many search queries. In late October, Google launched AI Overviews in 100 countries
The AI Overviews system uses Google’s in-house Gemini AI model. Advertisers utilizing Gemini AI tools see increased traffic and click-through rates, especially among younger demographics, Google says.
“We expect an eventful year for search in 2025, with new competition, a remedy ruling in DOJ case, and Google capitalizing on new AI overview format (better results, more ads),” said Bank of America analyst Justin Post in a report. “For the last three months, Google’s U.S. search share has increased, and the global rollout suggests Google is seeing a positive impact on search. We remain constructive on the AI opportunity for Google given potential benefits to search usage/monetization, YouTube content/targeting and cloud computing demand.”
The company’s Relative Strength Rating currently stands at 75 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS Rating of 80 or better.
Google stock holds an Accumulation/Distribution Rating of D+. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Further, shares hold an IBD Composite Rating of 93 out of 99. The best growth stocks have a Composite Rating of 90 or better.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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