The Google (NASDAQ: GOOG) stock price has underperformed the market as concerns about the company’s growth, competition with ChatGPT, regulations, and layoffs continue. Alphabet’s stock is hovering at $100, a few points above November’s low of $83.43 and significantly below its all-time high of $152. So, is Google a good stock to buy or is it safe to find opportunities elsewhere?
Fighting multiple battles
Google stock price is bracing for war. The most important challenge the company faces is ChatGPT, the popular platform that is changing the world through Artificial Intelligence (AI). The ecosystem has become so powerful that Microsoft has decided to take a large stake in it. It is also passing exams, answering extremely hard questions, and is even writing essays.
Some analysts, wrongly, believe that ChatGPT will help Bing beat Google in search. I believe that this is highly inaccurate considering that Google has decades of experience in the search industry. Most importantly, it has a full ecosystem that protects it from Bing. It owns Android, the most popular mobile application systems in the industry. Also, it owns Google Chrome, which is the most popular mobile and web browsers.
Another challenge for the Google share price is the ongoing investigation by the Department of Justice (DoJ). The investigation centers on the company’s monopoly in advertising technology. According to the DoJ, Google has impacted the industry through its serial acquisitions and auction manipulation. In other words, the DoJ accuses the company for having a full ad stack that makes it impossible for other companies to compete.
Again, I believe that this lawsuit is overhyped and that it will not have an impact on the company’s business in the long term. For one, authorities reviewed all the acquisitions that Google made and gave them a pass. Also, contrary to what many people believe, being a monopoly is not a crime. Therefore, this lawsuit is just another way for the DoJ to project its seriousness against big tech.
The next key catalyst for the GOOG stock price will be the upcoming earnings that are scheduled for February 2. Analysts expect that the company made $76.49 billion in the fourth quarter while its EPS came in at $1.20.
Google stock price forecast
The daily chart shows that the GOOG stock price made a double-bottom pattern at around $83.43. A double-bottom signals that a bearish trend is coming to an end and that buyers are starting to circle into an asset. This price has moved to the neckline of the double-bottom pattern. At the same time, it has formed what looks like a cup and handle pattern, which is usually a sign of a continuation.
Alphabet stock has moved above the descending trendline shown in green and the 23.6% Fibonacci Retracement level. Therefore, I believe that clouds of hope are circling the stock, which could see it rise to the 50% retracement point at $117 after earnings. This will be a 18% jump from the current level. A drop below the support at $94.90 will invalidate the bullish view.
