Is Alphabet Stock Going to $205? 1 Wall Street Analyst Thinks So.
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has been a long-term winner on the stock market as its dominance of online search and digital advertising has delivered strong growth and steady returns, fueling new businesses as well, like Google Cloud.
However, investors were underwhelmed by Alphabet's second-quarter earnings report as the stock fell on the news even though the company beat analyst estimates. YouTube revenue growth was weaker than expected and fears about increasing spending on artificial intelligence (AI) infrastructure weighed on the stock.
Now, one Wall Street analyst sees an opportunity in the sell-off as the stock is down 7% since the earnings report.
Image source: Getty Images.
Should you buy the dip on Google stock?
In a note published Monday morning, Phillip Securities raised its rating on Alphabet from accumulate to buy and lifted its price target on the tech giant from $195 to $205.
The company noted that Alphabet is the leader in digital advertising, and the analyst called it the market leader in artificial intelligence as well. While there doesn't seem to be a clear leader in AI applications at the moment as it's still early in the industry's development, Alphabet is certainly among the leaders, given products like its Gemini chatbot and AI assistant and its Waymo autonomous vehicle subsidiary.
Is Alphabet a buy?
Alphabet still faces risks, including a new search product from ChatGPT, but the company has overcome early doubts about its ability to keep pace with Microsoft and OpenAI, and the company has a long history of delivering growth despite a wide range of challenges. In other words, it's always paid off to buy the dip in Alphabet stock.
The company's competitive advantages seem as formidable as they ever have and the earnings results were strong despite the sell-off. Buying Alphabet stock now is more likely than not to pay off.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
