Piper Sandler has adjusted its price target for Alphabet Inc. (NASDAQ: NASDAQ:GOOGL), the parent company of Google, to $200 from the previous $206 while maintaining an Overweight rating on the stock.
The revision follows a conversation with an Antitrust lawyer regarding Alphabet's ongoing litigation with the Department of Justice (DOJ).
According to the lawyer's assessment, the government has presented a strong case in two out of three lawsuits against the tech giant.
The most critical case, concerning Google's Search operations, is expected to undergo a protracted process involving remedies and appeals. The analyst noted that while this trial proceeds, there could be changes in the administration and rapid technological advancements that may influence the outcome. The legal expert described the judge's initial ruling as "measured," suggesting that a company breakup is unlikely.
Piper Sandler acknowledges that Alphabet is facing near-term risks due to the legal headlines, but their valuation analysis indicates that these concerns are already reflected in the current stock price.
Alphabet Inc's Google has been unsuccessful in its attempt to overturn a $2.7 billion fine imposed by the European Union's antitrust regulators.
This fine is part of a series of penalties Google has faced in Europe, with the company accumulating €8.25 billion in EU antitrust fines over the past decade. Google is currently awaiting judgments for two other appeals related to rulings involving its Android mobile operating system and its AdSense advertising service.
In other recent developments, the U.S. Department of Justice is set to propose remedies in the ongoing antitrust case against Google's search operations by December. This case, part of a broader scrutiny by U.S. regulators into the business practices of major tech companies, could have implications for Google's operations and potentially for the wider technology sector.
Apple (NASDAQ:AAPL) is shifting its focus to artificial intelligence (AI) with the launch of its iPhone 16. The new phone showcases AI capabilities, diverging from Apple's traditional focus on hardware enhancements. This comes after the company introduced Apple Intelligence, a generative AI platform, and an improved Siri with ChatGPT integration.
InvestingPro Insights
Piper Sandler's recent reassessment of Alphabet Inc. (NASDAQ:GOOGL) aligns with several InvestingPro Tips that highlight the company's strong financial position. Alphabet holds more cash than debt, a significant indicator of financial health, especially in the face of ongoing litigation. Additionally, the company's oversold status, as suggested by the RSI, and its low P/E ratio relative to near-term earnings growth, suggest that the stock may be undervalued at its current price.
InvestingPro Data further underscores Alphabet's robust financials with a market capitalization of $1.84 trillion USD and a P/E ratio of 21.16, which adjusts to 20.24 when looking at the last twelve months as of Q2 2024. The PEG ratio for the same period stands at an attractive 0.44, indicating potential for growth relative to its earnings. Furthermore, the company's revenue growth remains strong at 13.38% for the last twelve months as of Q2 2024.
For investors considering Alphabet's long-term potential, these metrics may provide additional confidence. The company's profitability over the last twelve months and a history of high returns over the last decade are positive signs for those looking to accumulate shares amidst current market conditions.
For more detailed analysis and additional InvestingPro Tips on Alphabet Inc., investors can visit https://www.investing.com/pro/GOOGL, where 11 further tips are available to help make informed investment decisions.
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