Alphabet Stock Forecast: Is GOOGL a Good Buy in 2024?

Alphabet’s (GOOGL) stock price recently hit an all-time high closing price of $171.95 after announcing bumper results and its first dividend.

Shares in the US tech giant, which owns search engine Google, have increased 20% year-to-date and 56% over the 12 months to April 29, 2024.

The enthusiasm for the stock pushed its valuation over $2 trillion.

Alphabet (GOOGL) Stock Year-to-Date Performance

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 has risen 56% over the past year.
  • Alphabet announced its first-ever cash dividend.
  • Alphabet increased revenues by almost 9% to $307.4 billion in 2023.
  • Chief executive Sundar Pichai reaffirms commitment to AI.
  • Wall Street analysts rate the stock a “Moderate Buy.”
  • European Commission has launched an investigation into Alphabet under the Digital Markets Act.

Summary of the Latest Alphabet (GOOGL) Stock Predictions

Alphabet Stock Forecast

(as of April 29, 2024)

1-Year Forecast 2025 (December) 5-Year Forecast

(April 2029)

MarketBeat $189.44
WalletInvestor $177.54 $180.90 $197.46
TipRanks $189.79
CoinCodex $198.54 $404.79

Alphabet (GOOGL) Stock Analysis

It’s certainly been an exciting year for Alphabet, which is the world’s fourth-largest company with a valuation of $2.06 trillion, according to CompaniesMarketCap.

There have been bumper results achieved and exciting developments announced, as well as lawsuits to tackle and the financial impact of reducing staff numbers.

Here, we look at what’s been behind the GOOGL stock price over the last 12 months, which has seen it at lows of $103.27 and highs of more than $170.

Alphabet (GOOGL) Stock 1-Year Performance

Strong First Quarter Results

Let’s start our Alphabet stock forecast 2024 with the positives.

The company reported a 15% increase in revenues to $80.5 billion for the quarter ended March 31, 2024, up from $69.8 billion a year ago.

According to chief executive Sundar Pichai, the first quarter results reflect strong performance from Search, YouTube, and Cloud.

“We are well underway with our Gemini era and there’s great momentum across the company,” he wrote. “Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”

First quarter 2024 results. Source: Alphabet
First quarter 2024 results. Source: Alphabet

First Ever Dividend and Stock Repurchases

The company also announced the initiation of a cash dividend program and declared a cash dividend of $0.20 per share that will be paid on June 17, 2024.

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 have authorized the company to repurchase up to an additional $70 billion of its Class A and Class C shares.

According to Russ Mould, investment director at AJ Bell, 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.

Looming Interest Rate Cuts

“Joe Biden is keen for the US government to get a bigger slice of the buyback phenomenon by potentially increasing tax in this area,” he said. “His administration already laid down a 1% tax on buybacks last year and there is an aspiration to lift that amount to 4%.”

That threat, he believes, could have spooked companies into rethinking how they deploy surplus cash, hence bringing dividends into the equation.

“It could also be a retaliation against high interest rates, which have encouraged people to move some of their money invested in equities into cash savings accounts which offer decent returns for no risk,” he added.

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.”

 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.

Severance Costs

Compensation expenses, including employee severance for the three months to the end of March 2024 came in at $716 million.

The company had previously revealed that the cost of employee severance and related charges hit $2.1 billion over the course of 2023.

It also highlighted actions to optimize its global office space.

“As a result, exit charges recorded during the three and twelve months ended December 31, 2023, were $1.2 billion and $1.8 billion, respectively,” it explained in a statement.

Costs of Severance. Source: Alphabet
Costs of Severance. Source: Alphabet

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 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.

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 Forecast: Analyst Views

What are the ​​Alphabet stock predictions of the experts?

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.”

Danni Hewson, head of financial analysis at AJ Bell, believes Alphabet and the rest of the so-called ‘Magnificent Seven’ are under pressure to more than meet expectations.

This can make Google stock predictions rather tricky.

She told Techopedia:

“Alphabet has AI momentum on its side and the fact that advertisers are more than willing to buy into the hype as long as it does materially help them sell us products, we never knew we couldn’t do without.”

Hewson also believes Google’s search engine has a “special kind of power” that’s only afforded to brands that are so prolific they become adjectives.

“Add to that the burgeoning demands on the cloud and businesses’ readiness to spend cash on things that boost productivity even if the global economy is looking a bit weary.”

Of course, there are likely to be issues along the way. “There are regulatory concerns that investors need to be wary of but short of a real turkey, this earnings season is unlikely to put a hitch in Alphabet’s stride,” she added.

Michael Hodel, a director of Morningstar, currently has a fair value estimate of $179 on the stock, according to his most recent Alphabet stock forecast in late April 2024.

“Alphabet delivered strong results during the first quarter, with revenue growth accelerating and restructuring efforts driving margin expansion,” he wrote.

He also highlighted the institution of a dividend, which would “total about $10 billion annually” at the initial rate, as well as the authorizing of an additional $70 billion of share repurchases.

“While growth likely won’t maintain this quarter’s pace throughout the year, Alphabet’s results position it to exceed our expectations for the year,” he added.

As with Meta, the business is “ramping up efforts to develop artificial intelligence technology,” implying full-year spending of nearly $50 billion, up from $32 billion in each of the last two years.

“Alphabet is taking a tougher stance on costs than its AI rival, continuing to cut headcount and consolidating teams to blunt the impact of infrastructure investments on profitability,” he added.

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 share price forecast of 35 Wall Street analysts, compiled by MarketBeat as of April 29, 2024.

Twenty nine have ‘Buy’ recommendations in place, one sees the stock as a ‘Strong Buy,’ while five others view it as a ‘Hold.’

The overall consensus Alphabet stock forecast 2025 is for the stock to rise 14.02% to $189.44 over the coming year, although opinions vary enormously.

While the most optimistic believe the stock price could reach $225, some analysts warn that it could actually fall to $140.

The following table shows the 10 latest analysts’ Alphabet stock predictions.

Date Analyst Firm Action Rating Change Price Target Percentage Change
4/29/2024 Susquehanna Boost Target Positive ➝ Positive $170.00 ➝ $225.00 +32.55%
4/26/2024 Oppenheimer Boost Target Outperform ➝ Outperform $185.00 ➝ $205.00 +19.65%
4/26/2024 BMO Capital Markets Boost Target Outperform ➝ Outperform $180.00 ➝ $215.00 +25.49%
4/26/2024 Roth Mkm Boost Target Buy ➝ Buy $164.00 ➝ $202.00 +17.26%
4/26/2024 TD Cowen Boost Target Buy ➝ Buy $170.00 ➝ $200.00 +16.10%
4/26/2024 Raymond James Boost Target Outperform ➝ Outperform $160.00 ➝ $200.00 +16.10%
4/26/2024 Truist Financial Boost Target Buy ➝ Buy $170.00 ➝ $190.00 +10.06%
4/26/2024 Royal Bank of Canada Boost Target Outperform ➝ Outperform $155.00 ➝ $200.00 +16.42%
4/26/2024 Jefferies Financial Group Boost Target Buy ➝ Buy $180.00 ➝ $200.00 +16.20%

Source: MarketBeat, as of April 29, 2024

According to the algorithmic predictions of Wallet Investor, the stock price could hit $177.54 over the coming year.

While an Alphabet stock forecast 2030 is too far ahead, the site’s five-year forecast to April 2029 has the price at $197.46.

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 given the looking prospect of the company paying its 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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Rob Griffin
Financial Journalist
Rob Griffin
Financial Journalist

Rob is a seasoned journalist with over three decades of experience spanning across business and finance journalism. Before embarking on a freelance career in 2002, he contributed his expertise to the business desks of notable publications such as The Guardian, Yorkshire Post, Sunday Business (now Business Post), and Sunday Express. Throughout his freelance journey, Rob has been a regular contributor to a wide range of national newspapers, consumer magazines, trade publications, and websites. His work has appeared in titles such as The Independent, Citywire, Daily Express, FT Adviser, and Sunday Telegraph, covering an array of subjects from market trends to…