Here is the 11th edition of Stock of the Week. You can find all the previous analyses and my articles on my main page (for an easier search, use a computer, mobile version is harder to navigate).
Here are the links to the 3 previous “Stocks of the Week” as well
This week, we are focusing on Alphabet. After hitting its ATH near $200, the stock has dropped 20%, reaching new interesting support levels. Let's analyze whether it is a compelling investment opportunity!
Would you consider investing in Alphabet? Share your thoughts in the comments
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One Pager
The stock at a glance!
Recent news
Alphabet recently announced (like other hyperscalers) that it will be accelerating in AI and increase its CAPEX. You can find more in this article
To fuel the required datacenters, Alphabet also recently announced huge investment in the nuclear energy as I described in this article
Given the company's massive size and dominant position, it faces numerous lawsuits for various reasons, including its search monopoly in the US, Ad Tech practices, Chrome monopoly, alleged ad market collusion with Meta, and local disputes with governments worldwide
Google released Gemma 3 AI models on March, 2025, boosting efficiency in the AI race against OpenAI
Waymo launched autonomous ride-hailing in Silicon Valley (Sunnyvale, Palo Alto), following rollouts in Phoenix, LA, SF, and Austin. Waymo, once a bet, is now a potential ultra strong revenue stream and could be valued above $400B
Quantum computing is an exciting area of development for Alphabet, though widespread commercial applications remain a distant prospect for now
Last earnings report
Despite solid growth, Alphabet missed revenue expectations, reporting $96.5B instead of the expected $96.7B. EPS surged 31%, while cloud revenue grew around 30%, and CAPEX increased.
However, shares tumbled over 9% in after-hours trading due to the revenue miss and rising AI cost concerns.
Analysts’ recommendations
March, 10. JP Morgan. Buy. $220
February, 26. Wolfe Research. Buy. $220 —> $210
February, 21. Punto Research. Hold —> Buy. $204
February, 13. Arete Research. Buy. $215
February, 10. President Capital. Buy. $212 —> $215
February, 10. Daiwa. Buy. $213 —> $225
February, 7. CICC. Buy. $200 —> $219
February, 6. CICC. Buy. $200 —> $220
My analysis
Alphabet remains one of the world's strongest companies, with its advertising business serving as a cash cow that fuels growth in high-potential sectors like Cloud and AI
Waymo is a standout, with Alphabet gaining a significant edge in autonomous driving. Thanks to its deep financial resources, the company is well-positioned to support this capital-intensive venture
Beyond that, Alphabet is making bold investments in future revenue streams, including Quantum Computing or Healthcare, demonstrating its long-term vision
The company also has room to improve profitability by optimizing costs, particularly in areas like stock-based compensation (SBC), which exceeds $100K per employee on average
Of course, risks exist (regulation, competition, and reliance on Search for 60% of revenue) but these concerns appear to be priced into the current valuation, making Alphabet an interesting long-term opportunity
If you are interested in Alphabet, here is my deep dive about it
Technical analysis
I have defined three buying zones that I find interesting for long-term investments during pullbacks. While these zones may not be reached, I am prepared for a market (or stock) consolidation to seize long-term opportunities. For me, this approach offers a better risk/reward ratio.
Of course, this is just my opinion, and I am sharing it with you, but each investor should decide on their own investment style. With that said, here are my three buying zones for Alphabet.
Buying zone 1. $162 (roughly the current price)
Buying zone 2. $150
Buying zone 3. $125
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Used source: Marketscreener.com. Affiliate link just here
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