Google parent company Alphabet Inc‘s GOOGL GOOG shares have seen better days. The stock
has plummeted 35% from its all-time highs, landing it squarely in bear market territory.
Among the tech giants, Alphabet’s downturn is more severe than most, leaving investors wondering if it’s time to
buckle up for a rebound or remain cautious.
Assessing Alphabet’s Stock Performance
Technically speaking, Alphabet stock is deep in bearish waters. The stock is trading below its five, 20- and 50-day
exponential moving averages (EMAs), signaling a strongly bearish trend. However, a bit of buying pressure suggests
a potential future turnaround.
The share price sits at $157.53, slightly above its eight-day simple moving average (SMA) of $153.17, flashing a
bullish signal in the short term. Still, with the stock below its 20-day SMA of $159.68 and the 50-day SMA of
$168.01, the broader picture screams bearish.
The 200-day SMA at $157.08 is almost in sync with the stock price, with the stock having traded below this average
over the recent past.
The MACD indicator is a gloomy at a negative 4.01, another bearish flag, while the Relative Strength Index (RSI) of
45.74 says Alphabet stock is neither overbought nor oversold. The Bollinger Bands, ranging between $149.03 and
$171.41, with the stock trading in the lower bearish band – point towards further selling pressure.
Exploring Investor Sentiment Towards Google Stock
What factors are contributing to Alphabet investors and traders’ bearish sentiments?
For starters, the U.S. Department of Justice slapped the company with an antitrust lawsuit, with Europe not far
behind in its own antitrust cases. This regulatory scrutiny leaves investors anxious about potential penalties that
could weigh heavily on the stock.
Additionally, Alphabet’s substantial investment in AI development, while promising, is straining short-term capital
efficiency, causing concerns among investors.
Considering Alphabet’s Potential for Revival
Is Alphabet poised for a resurgence despite current challenges?
One reason to consider an Alphabet comeback is its solid balance sheet. With revenue growing at 18.16% annually and
EPS climbing 21% over the last five years, supported by aggressive share buybacks, Alphabet shows stability. Minimal
debt, healthy cash reserves, and the recent introduction of a dividend provide further incentives for long-term
investors.
Once Alphabet successfully navigates antitrust issues and optimizes its AI-related capital expenditure, the company
could potentially return to its former capital-efficient state, presenting an opportunity for a rebound over the
long term.
In the short term, the road ahead may appear challenging for Alphabet stock investors, but the company’s fundamental
strengths hint at a brighter future.
