Alphabet’s (GOOGL) stock price hit an all-time high closing price of $191.18 in July this year, but the last few weeks have been more volatile.
Shares in the tech giant slipped in the wake of its second-quarter results when investors raised concerns about the amounts being spent on artificial intelligence (AI).
As the stock market closed on August 22, 2024, the stock price was down to $163.80, although it’s still the world’s fourth-largest company with a market capitalization of $2.03 billion.
But is now the time to buy GOOGL stock, or should prospective investors sit tight? What are the latest Alphabet stock predictions of industry experts?
In our Alphabet stock forecast, we consider the key performance drivers for the stock and what to watch out for in 2024, 2025, and beyond.
Key Takeaways
- The GOOGL stock price hit an all-time high closing price of $191.18 in July 2024.
- Alphabet announced its first-ever cash dividend.
- Alphabet increased revenues by 14% to $84.74 billion in the second quarter.
- Analysts have raised concerns about the amounts spent on AI.
- Wall Street analysts rate the stock a “Moderate Buy” as of August 23, 2024.
- European Commission has launched an investigation into Alphabet under the Digital Markets Act.
- Show Full Guide
Summary of the Latest Alphabet (GOOGL) Stock Predictions
| Alphabet Stock Forecast (as of August 23, 2024) |
1-Year Forecast | 2025 (December) | 5-Year Forecast (August 2029) |
|---|---|---|---|
| MarketBeat | $203.74 | – | – |
| WalletInvestor | $176.31 | $177.71 | $227.10 |
| TipRanks | $205.18 | – | – |
| CoinCodex | $195.41
(January 2025) |
– | $398.41
(January 2029) |
Alphabet (GOOGL) Stock Analysis
It has certainly been an interesting time for Alphabet.
The company has reported strong results, announced exciting developments, as well as tackling lawsuits and the financial impact of reducing staff numbers.
This melting pot of positives and negatives has obviously had an impact on both the Google stock price and the Alphabet stock outlook of analysts.
The stock rose 47% from $130 in March to an all-time high closing price of $191.18 in July. However, the Alphabet stock projections of analysts indicate it’s been a bit more volatile since.
In fact, it has since fallen around 14% to $163.80 as the stock market closed on August 22, 2024.
Here, we look in more detail at what’s been behind the GOOGL stock price over the last 12 months, which has seen it at lows of $120 and highs of more than $190.
Strong Second Quarter Results
Let’s start our Alphabet stock forecast 2024 with the positives.
The company reported a 14% increase in revenues to $84.74 billion for the quarter ended June 30, 2024, up from $74.60 billion a year ago.
According to CEO Sundar Pichai, the second-quarter results highlighted ongoing strength in Search and momentum in Cloud.
“We are innovating at every layer of the AI stack,” he said. “Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”
Ruth Porat, Alphabet’s president and chief investment officer, said:
“We delivered revenues of $85 billion, up 14% year-on-year driven by Search as well as Cloud, which for the first time exceeded $10 billion in quarterly revenues and $1 billion in operating profit.
“As we invest to support our highest growth opportunities, we remain committed to creating investment capacity with our ongoing work to durably re-engineer our cost base.”
Investor Concerns Over AI
Danni Hewson, head of financial analysis at AJ Bell, believes Alphabet investors have been “royally spooked” by the latest earnings updates and have made their concerns crystal clear.
The fact of having seven big stocks dominating market sentiment means if they hit a wall, someone’s going to get hurt. This can make Google stock predictions rather tricky. She said:
“Whilst Alphabet’s news wasn’t awful, the fact they’re still ploughing billions into AI has caused some to begin questioning when enough will be enough, or at least when the expenditure will deliver the kind of results investors have been salivating over elsewhere in the AI space.”
First Ever Dividend and Stock Repurchases
Previously, Alphabet had announced the initiation of a cash dividend program as part of its first-quarter results announcement.
It stated: “The company intends to pay quarterly cash dividends in the future, subject to review and approval by the company’s Board of Directors in its sole discretion.”
In addition, Alphabet’s Board of Directors has authorized the company to repurchase up to an additional $70 billion of its Class A and Class C shares.
Russ Mould, investment director at AJ Bell, said at the time that Alphabet joining the ranks of tech companies paying dividends is a sign of the times. He said:
“Big tech firms have enjoyed stellar growth over the past decade and while most remain highly innovative, their cash flows have become so strong that there’s oodles of money left over post-reinvestment in the business to reward shareholders.”
Mould insisted the previous lack of dividend wasn’t due to the company being “tight on cash,” but that share buybacks were seen as the preferred way to deploy surplus money.
Looking ahead, Mould suggested that the prospect of interest rate cuts means companies have an opportunity to lure back some of these people as cash rates trend downwards.
“Alphabet and Meta, which also joined the dividend club fairly recently, could now appeal to a broader group of investors,” he explained. “The yields on offer from Alphabet and Meta are minuscule but the pace of dividend growth could be the key attraction for income hunters.”
Alphabet News: Key Drivers to Consider
So, what do the coming years have in store for Alphabet? The next part of our Google stock forecast looks at the positive and negative factors that may influence returns.
Commitment to Responsible AI
In a document published last summer, Kent Walker, Google and Alphabet’s president of global affairs, outlined the company’s commitment to responsible AI development.
“It’s not enough for AI to make better services — we also want to use it to make those services safe and secure,” he wrote. “We design our products to be secure-by-default — and our approach to AI is no different.”
Walker noted the business was proud to work with other leading AI companies in committing to advancing responsible practices in development.
“Addressing AI-generated content will require industry-wide solutions, and we look forward to working with others, including the Partnership on AI’s synthetic media working group,” he added.
Building for the Future
Chief executive Sundar Pichai recently unveiled plans to streamline the company’s structure in a bid to speed up its AI efforts.
In a memo sent to Google staff in April 2024, he revealed that teams working on AI models, including research, would be unified within its DeepMind division.
“AI gives us an incredible opportunity to reimagine computing platforms for the next decade — transforming Android, Chrome, Search, Photos and so many other products to be more helpful for people everywhere,” he wrote.
Lawsuits
A blight on the company has been battling legal disputes.
In late December 2023, it was reported that Google had agreed to settle a lawsuit claiming it secretly tracked the internet use of people who thought they were browsing privately. The claim had been for at least $5 billion.
Also in December, it was reported that Google will pay $700m to settle a lawsuit brought by a group of US stakes accusing it of quashing competition to its Play Store on Android devices.
Investigation Launched
However, when we’re looking at GOOGL news, not everything on the horizon is as exciting as its AI developments.
In late March 2024, the European Commission opened a non-compliance investigation against Alphabet, Apple, and Meta under the Digital Markets Act.
It stated:
“The Commission has opened proceedings against Alphabet, to determine whether Alphabet’s display of Google search results may lead to self-preferencing in relation to Google’s vertical search services (e.g., Google Shopping; Google Flights; Google Hotels) over similar rival services.”
The Commission intends to conclude these proceedings within 12 months. In case of an infringement, it can impose fines of up to 10% of the company’s total worldwide turnover.
Margrethe Vestager, executive vice president in charge of competition policy at the Commission, added:
“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA. We will now investigate the companies’ compliance with the DMA, to ensure open and contestable digital markets in Europe.”
Alphabet Stock Predictions: Analyst Views
Next, we look at the Alphabet stock predictions of the experts.
Will the Alphabet future stock price be higher or lower than it is today, and what are the Alphabet stock expectations of leading stock market analysts?
Michael Hodel, a director of Morningstar, has increased his fair value estimate to $182 from $179 as of July 24, 2024. He said:
“Solid ad revenue growth during the second quarter contradicts the notion that Alphabet is losing its footing in the search business. Also, growth in the Google Cloud business accelerated again, reaching the fastest pace in 18 months as AI tools augment broader cloud adoption.”
Looking ahead, Hodel believes operating margin expansion is likely to slow across Alphabet’s businesses during the second half of the year. This will be due to depreciation expenses ramping up following the surge in infrastructure investment.
“However, the firm still expects efficiency gains across the business to allow the operating margin to expand in 2024 versus the prior year,” he said.
Dan Coatsworth, investment analyst at AJ Bell, branded it “another robust quarter” but pointed out that it hadn’t been all plain sailing.
He said: “Alphabet is having to work harder to stay on top amid unpredictable corporate advertising demand and competition heating up in search and cloud computing.”
He highlighted investors’ concerns over the slowdown in Google’s advertising growth at 11.1% in the second quarter, versus a 13% gain in the previous three-month period year-on-year.
“YouTube’s advertising revenue was also slightly below forecasts,” he said. “That triggered volatility in the share price in after-hours trading, despite a strong showing from the cloud arm and overall earnings beating expectations.”
However, Coatsworth is optimistic about the company’s future prospects.
“What’s clear is that Alphabet still has plenty of ideas for how to innovate and the financial strength to try lots of new things,” he said. “Not everything will work, but its willingness and capacity to have a go is a major advantage. Beating earnings expectations for six quarters in a row also shows the business still has plenty of fuel left in the tank.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes that artificial intelligence presents both vast opportunities but also deep challenges for Alphabet.
She told Techopedia:
“On the one hand, generative AI risks eating into the strength of Alphabet’s search capabilities. On the other, demand for Google Cloud services is expected to see sustained growth as companies upgrade storage to process demands of data-intensive AI workloads.”
Alphabet’s latest large language AI model, Gemini, has been praised for its more intuitive, detailed, and conversational tone capabilities compared to ChatGPT.
However, Streeter believes it’s unclear how all of this will play out over the longer term.
She added:
“There are likely to be some steep regulatory hurdles to cross as competition watchdogs catch up with these fast-moving innovations which will be another risk for investors to keep an eye on.”
Latest Alphabet Stock Forecasts for 2024, 2025 & 2030
So, is Alphabet a buy, hold, or sell?
The company is rated as a ‘Moderate Buy,’ according to the Alphabet stock prediction 2025
of 35 Wall Street analysts, compiled by MarketBeat as of August 23, 2024.
Twenty-eight have ‘Buy’ recommendations in place, one sees the stock as a ‘Strong Buy,’ while six others view it as a ‘Hold.’
The overall consensus Alphabet stock forecast 2025 is for the stock to rise 24.39% to $203.74 over the coming year, although opinions vary enormously.
While the most optimistic believe the stock price could reach $240, some analysts warn that it could actually fall to $165.
The following table shows the 10 latest analysts’ Alphabet stock predictions and their GOOGL price targets.
| Date | Analyst Firm | Action | Rating Change | Price Target | Percentage Change |
|---|---|---|---|---|---|
| 8/14/2024 | Needham & Company | Reiterated Rating | Buy ➝ Buy | $210.00 ➝ $210.00 | +27.92% |
| 8/6/2024 | BMO Capital Markets | Reiterated Rating | Outperform ➝ Outperform | $222.00 ➝ $222.00 | +40.87% |
| 7/30/2024 | JMP Securities | Reiterated Rating | Market Outperform ➝ Market Outperform | $200.00 ➝ $200.00 | +17.67% |
| 7/24/2024 | Citigroup | Boost Target | Buy ➝ Buy | $190.00 ➝ $212.00 | +22.82% |
| 7/24/2024 | Roth Mkm | Boost Target | Buy ➝ Buy | $202.00 ➝ $206.00 | +18.34% |
| 7/24/2024 | Royal Bank of Canada | Boost Target | Outperform ➝ Outperform | $200.00 ➝ $204.00 | +17.31% |
| 7/24/2024 | UBS Group | Boost Target | Neutral ➝ Neutral | $200.00 ➝ $204.00 | +17.31% |
| 7/24/2024 | Mizuho | Boost Target | Outperform | $205.00 ➝ $210.00 | +20.76% |
| 7/24/2024 | Truist Financial | Boost Target | Buy ➝ Buy | $190.00 ➝ $196.00 | +12.71% |
Source: MarketBeat, as of August 23, 2024
According to the algorithmic predictions of Wallet Investor, the stock price could hit $176.31 over the coming year.
But what about an Alphabet stock long-term forecast? The site’s five-year forecast to August 2029 has the price at $227.10.
Meanwhile, according to the Alphabet stock forecast 2030 of Coincodex, the stock could reach $476.07.
However, it’s important to note that analysts’ and algorithm-based projections might prove to be wrong.
The Bottom Line: Should I Invest in Alphabet?
It’s certainly been a terrific start to 2024 for Alphabet investors, particularly regarding the company’s first-ever cash dividend.
But what is likely to happen to the GOOGL stock price in the coming months and years?
Well, a lot of Alphabet’s future success depends on the amount of digital ad spending that companies plan to make over the next few years.
The positive view is that this figure will continue rising on the back of more online users. As a leading name in the search engine world, this means Google will benefit.
However, the company is heavily dependent on this revenue source, so any disappointment in this area is likely to hit the share price hard.
Do your own research and always remember your investment decision depends on your attitude to risk, your expertise in the stock market, the spread of your portfolio, and how comfortable you feel about losing money.
The information in this article does not constitute investment advice and is meant for informational purposes only.
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References
- Alphabet – 20 Year Stock Price History | GOOGL | MacroTrends (Macrotrends)
- Alphabet (Google) (GOOG) – Market capitalization (Companiesmarketcap)
- Alphabet Announces Second Quarter 2024 Results (Abc)
- Alphabet Announces First Quarter 2024 Results (Abc)
- Our commitment to advancing bold and responsible AI, together (Blog)
- PAI Announces Google to Join Framework for Collective Action on Synthetic Media (Partnershiponai)
- Building for our AI future (Blog)
- Google settles $5 billion consumer privacy lawsuit | Reuters (Reuters)
- Subscribe to read (Ft)
- Press corner | European Commission (Ec.europa)
- Alphabet (GOOGL) Stock Forecast and Price Target 2024
(Marketbeat) - Alphabet Inc Class A Stock Forecast: up to 176.305 USD! – GOOGL Stock Price Prediction, Long-Term & Short-Term Share Revenue Prognosis with Smart Technical Analysis (Walletinvestor)
- Alphabet – Class A (GOOGL) Stock Forecast & Price Prediction 2025, 2030 | CoinCodex (Coincodex)
