Google parent company Alphabet Inc‘s GOOGL GOOG shares have seen better days. The stock has plummeted 35% from its all-time highs, landing it squarely in bear market territory.
Among the tech giants, Alphabet’s downturn is more severe than most, leaving investors wondering if it’s time to buckle up for a rebound or remain cautious.
Alphabet Stock In Deep Bearish Waters
Technically speaking, Alphabet stock is deep in bearish waters. The stock is trading below its five, 20- and 50-day exponential moving averages (EMAs), signaling a strongly bearish trend. However, a bit of buying pressure suggests a potential future turnaround.
Despite a slight rise to $157.53 (above its eight-day simple moving average of $153.17), the broader picture remains bearish, with the stock below its 20-day SMA of $159.68 and the 50-day SMA of $168.01.
Notably, the MACD indicator at a negative 4.01 and the Relative Strength Index (RSI) at 45.74 indicate continued bearish sentiment. The Bollinger Bands, with the stock in the lower bearish band, suggest further selling pressure.
Why Are Google Stock Investors So Bearish?
What’s fueling this bearish sentiment among Alphabet investors and traders?
Recent antitrust lawsuits from the U.S. Department of Justice and European authorities have stirred concerns over potential penalties. Additionally, heavy investment in AI development, while promising, is straining short-term capital efficiency.
Is Alphabet Poised For Comeback?
Why consider an Alphabet comeback?
Alphabet’s balance sheet remains robust, with consistent revenue growth and EPS increase over the last five years. Furthermore, minimal debt, healthy cash reserves, and a new dividend offering strengthen its long-term investment appeal.
While navigating regulatory challenges and optimizing AI investments, Alphabet could regain its capital efficiency, setting the stage for a potential rebound in the future.
In the short term, the outlook for Alphabet stock remains challenging.