Connect with us

Hi, what are you looking for?

Investing

Google stock just got a rare downgrade

google stock outlook loop capital

Alphabet Inc (NASDAQ: GOOGL) has done fairly well since the start of this year but a Loop Capital analyst recommends that investor move with caution from here on out.

AI mania could be a headwind for Google stock

Rob Sanderson downgraded the tech stock to “hold” this morning as he doesn’t see it a given that Google will maintain its dominance through the ongoing craze around artificial intelligence.

It’s noteworthy that the multinational made a series of AI focused announcements last week. Still, the analyst said in his research note:

We consider search competition from Microsoft a lesser threat than risk of displacement from behavioural change as users interact more with AI assistants to find information.

His $125 price objective on Google stock still represents about a 7.0% upside from here, though.

Google should focus more on cutting costs

Earlier this year, the tech behemoth announced plans of lowering its headcount by a whopping 12,000 to cut costs.

But Sanderson sees a need for more considering its expense per employee is still the highest among the big four tech companies. On the AI front, the analyst also said:

We disagree with management’s characterization that AI proliferation is similar to transition to mobile. Long-term structural uncertainties surrounding AI will keep investors nervous as landscape evolves and put a ceiling on valuation.

Nonetheless, Alphabet reported market-beating results for its first financial quarter last month as Invezz reported here. Versus the start of 2023, Google stock is up close to 30% at writing.

The post Google stock just got a rare downgrade appeared first on Invezz.

You May Also Like

Financial News

McCarthy’s Speakership Hangs in the Balance as House Greenlights Stopgap Funding Bill: A Defining Moment Looms In a stunning turn of events, the future...

Financial News

Conservatives Call for GOP Candidates to Step Aside After Second Debate: A Call to Streamline the Republican Race In a surprising turn of events,...

Financial News

Poll Unveils GOP Primary Voters’ Resounding Verdict on Best Republican Debate Performance In the midst of a heated Republican primary race, the GOP primary...

Financial News

Jeffries’ Strategic Maneuver: Outsmarting McCarthy to Avert Shutdown Crisis