After lagging behind tech peers for months, Alphabet's (GOOGL, Financial) stock is showing signs of revival. Investors are optimistic about the upcoming second-quarter earnings report, hoping it will exceed expectations and overshadow potential risks from a U.S. Department of Justice antitrust ruling. This year, Alphabet's stock has seen positive movement for the first time, despite the threat of severe measures, such as company break-up, as early as August.
Analysts forecast Alphabet's Q2 revenue at $80 billion, a 12% year-over-year increase, and earnings per share at $2.18, up 15%. This positive outlook has driven investor interest, considering Alphabet's competitive edge in artificial intelligence (AI). Market trends predict steady revenue growth through 2028.
Despite antitrust worries suggesting a sale of Chrome and limits on its search engine dominance, Alphabet remains strong in AI, cloud, and search capabilities. New AI features launched in May have been well-received, and OpenAI plans to expand its use of Google Cloud services, further boosting revenues. The stock maintains approximately a 7.9% growth potential toward analysts' target prices, with a current P/E ratio of 18, making it cheaper compared to Microsoft's 33.
