Alphabet Stock: Stocks of Alphabet Inc. (NASDAQ: GOOGL, GOOG) are showing signs of life again, rebounding nearly 20% off their 52-week lows, reigniting debate over whether the tech giant is entering a new bullish phase or facing a temporary bounce in a broader bearish cycle.
Alphabet’s Class A (GOOGL) and Class C (GOOG) shares both posted gains this week, with GOOG closing at $171.17, up 1.05% on Tuesday. Despite this short-term strength and a +4.42% gain over the past month, the stock remains down over 10% year-to-date and is off 3.02% over the past year.
Bullish Catalysts: AI Momentum and Valuation Discount
At the heart of the bull case is Alphabet’s accelerating AI strategy, unveiled in detail during the recent Google I/O 2025 developer conference. The company showcased its flagship Gemini AI models, which are now integrated across Search, Android, and Workspace products. Notably, the new AI Overviews feature is already reaching 1.5 billion users in 140 countries, and management says it’s being monetized similarly to traditional search ads.
Alphabet’s core businesses remain robust. Google Search still commands 88% market share in the U.S., and YouTube pulled in $10.47 billion in ad revenue last quarter. Meanwhile, Google Cloud has grown into a major enterprise solution provider, and Waymo, Alphabet’s autonomous driving unit, continues to expand in over 10 U.S. cities.
Valuation is another major draw for investors. Alphabet is currently trading at a forward P/E ratio of just 16.3, well below its historical average of 28. This suggests that the market is discounting its long-term earnings power, presenting a potential buying opportunity for long-term investors.
Bearish Risks: Search Competition, Antitrust Battles
Despite recent gains, skeptics warn that Alphabet’s dominance in search and advertising is no longer guaranteed. Reports suggest that Apple is considering shifting its default search engine in Safari and Siri to AI-driven alternatives like OpenAI’s ChatGPT or Perplexity AI, which could undercut a major revenue stream for Google.
Regulatory pressures also remain intense. Alphabet is facing multiple antitrust lawsuits in both the U.S. and the EU, particularly over its advertising business and search practices. Additionally, stricter data privacy laws could reduce the effectiveness of targeted advertising, which is a core pillar of its business.
Some analysts also point out that despite its AI push, Alphabet has yet to demonstrate sustained earnings acceleration. If AI growth doesn’t fully compensate for a potential decline in search market share, the stock could risk becoming a value trap—cheap for a reason.
Should You Buy Alphabet Stock Now?
While Wall Street sentiment is moderately bullish, with major firms like JPMorgan reiterating an “Overweight” rating and a $195 price target, Alphabet was not among the top five stocks recently recommended by MarketBeat’s top-rated analysts.
In the short term, technical indicators remain mixed. The stock is trading near the midpoint of its 52-week range, and while the 20% rebound from its recent lows could signal a new bull market, it has yet to break above key resistance levels.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Readers should consult with a licensed financial advisor before making any investment decisions.