The Bears Are Wrong on GOOG Stock
Amid the reports that Alphabet Inc (NASDAQ:GOOG) should not buy Twitter at the current high valuation, here comes another report that lists all the threats that Alphabet Inc—otherwise known as Google—is likely to face in the future.
Nevertheless, Google stock has earned handsome returns for its investors over the last year, and the company’s new products and services look very promising.
Wedbush Securities analysts James Dix and Aria Ertefaie have downgraded Alphabet stock to $700.00 from $800.00. Their concerns are the impending arrival of “self-identified consumers, consumer control of IP-delivered ads, payments innovation and attention markets.” (Source: “Alphabet Downgraded, Target Cut To $700: Wedbush Fears ‘The Four Horsemen Of The Search Apocalypse‘,” Benzinga, September 27, 2016).
However, we feel that these concerns are overdone. Alphabet is a company that is intertwined with our Internet lives and there are not many potential competitors around who can change that.
Alphabet is the leader in the Internet search business and it is a dominating player in the video and mobile segments. The company is experimenting with cutting-edge technology and is not far behind Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Facebook Inc (NASDAQ:FB) in shaping our futuristic lives.
Google is a leading provider of artificial intelligence (AI)-assisted language translation, and the company has just announced a new technique that will greatly improve results. It is called the “Google Neural Machine Translation System” (GNMT), and it is now capable of taking an entire sentence and translating it into another language. (Source: “Google’s AI Translation system is approaching human-level accuracy,” The Verge, September 27, 2016.)
The company has just introduced a number of new products like “Google Station” and “YouTube Go” for its Asian markets—especially India—which are high-growth opportunities for the company. Apart from owning valuable properties like “Google Search,” “Google Maps,” “YouTube,” and “Gmail,” Alphabet is also into designing innovative products like the “Google Home” smart speaker and autonomous cars. Hence, there are many catalysts for Google stock.
Next week, on October 4, Alphabet is expected to host one of the most highly anticipated events when it unveils its new “Pixel” phones and other new products. And now additional reports are coming in that the company might release a new laptop and tablet that run on a totally new operating system called “Andromeda,” which will merge aspects of “Chrome OS” into “Android.” (Source: “Exclusive: Google is planning a ‘Pixel 3’ laptop running the ‘Andromeda’ OS for release in Q3 2017,” Android Police, September 26, 2016.)
These new launches are likely to keep GOOG stock in limelight.
The markets are looking forward to the new announcements next week and there is a lot of excitement surrounding the new product launches. Although there will always be new entrants, as well as existing players in the competitive online advertising space, the company’s myriad bets in cutting-edge technology shall keep GOOG stock buoyant.