Shares of Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) have been under pressure of late as concerns mount about the company’s antitrust issues. Earlier this year, a judge ruled that Google Search did act as a monopoly but the big question mark now is what will happen with the business. The Department of Justice recently suggested the sale of the Chrome browser, which it believes will help level the playing field when it comes to search.
Alphabet’s stock has been declining as a result of the news but it’s still nowhere near its lows for the year. Investors, are, however, worried about what lies ahead for the stock. But despite the recent selling pressure, the stock’s 50-day moving average remains above the 200-day average. And with the new Trump administration taking over next year, there is hope for Alphabet investors that the new government won’t be as aggressive on tech companies.
But there are also concerns ahead about what may happen as artificial intelligence chatbots potentially chip away at Google’s market share in the future, as consumers may be less reliant on using Google Search with chatbots and AI-powered computers offering more immediate and personalized assistance. Google ads generated nearly $66 billion in revenue for Alphabet in the September quarter, accounting for three-quarters of the company’s top line. Whatever happens with ads and Google Search will undoubtedly have a huge impact on Alphabet’s valuation.
Alphabet’s stock is trading at 19 times next year’s earnings and it could be a good contrarian pick, but only if you’re comfortable with the risk as its future is definitely hazy.
