Alphabet (GOOGL) is one of several top stocks down big to start 2025, which creates debate on whether investors should buy its dip or not. Year-to-date, GOOGL is down nearly 15% coming off of a profitable 2024 in terms of growth. Entering 2025, analysts were bullish on Alphabet shares, and that sentiment still exists despite the dropoff. Thus, is now a no-doubt opportunity to buy a premium stock at a bargain price?
Some started predicting Google’s demise after OpenAI introduced ChatGPT in late 2022. However, Alphabet remains a powerful player in the AI market. The company launched AI Overviews, which merges generative AI with search. Today, AI Overviews are available in more than 100 countries and are driving user satisfaction and Google search engine usage. Additionally, Alphabet’s Google Cloud service remains a potential driver for GOOGL growth. The service is behind its rivals, but is growing at a faster pace. Thus, a rebound for GOOGL stock could come sooner amid the overall market downturn.
Furthermore, Alphabet recently agreed to a $32 billion deal to buy Wiz, according to a Reuters report. The move will help Google better compete with both Microsoft (MSFT) and Amazon (AMZN) in the cloud computing space. As the gap between those three closes, GOOGL stock could be in a prime position to surge, especially coming from as low of a price it currently sits at.
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Google has generated $54 billion of the company’s total $96 billion revenue in Q4. Moreover, Alphabet generated $100 billion in net profit on $340 billion in revenue last year from advertising alone. Although there are questions about the ad market in a struggling economy, the company could be protected. In 2022, when the ad market was falling, GOOGL still grew 10%.
According to analysts at TipRanks, GOOGL stock has strong buy signs over the next 12 months, suggesting a strong rebound is imminent. CNN shares the same sentiment, suggesting a potential ROI of 53% over the next 12 months if you buy now. Out of 50 analysts polled by CNN, 79% suggest to buy, with the remaining 21% suggesting to hold GOOGL, not sell.