Alphabet Stock Analysis: Buy, Sell, or Hold? Weighing the Pros and Cons of GOOG.

You may already be invested in Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), and perhaps you’re thinking about starting or adding to a share position. Alphabet stock is a Magnificent Seven member, but not without its problems. Overall, we give it a “B” grade and encourage you to consider both the pros and cons.

After all, being a full-on perma-bull or perma-bear isn’t the ideal attitude. This is true whether you’re investing in Alphabet or any other company. Ultimately, you may decide to be optimistic but also watchful, and to maintain a moderately sized Alphabet share position.

Are Alphabet’s Legal and Regulatory Issues Unmanageable?

By now, there’s a good chance that you’ve heard about the government led antitrust lawsuits against Alphabet and/or Google. There’s one happening in the U.S., plus another one in Europe that Alphabet/Google appears to have already lost.

These lawsuits can cause serious financial and reputation damage to Alphabet. They probably won’t stop people from using Google’s search engine, of course. Still, it seems that the legal/regulatory issues keep on piling up against Alphabet.

For instance, a group of Japanese doctors are suing Alphabet in Tokyo District Court over allegations of false/derogatory reviews on Google Maps. Japan’s Fair Trade Commission, an antitrust watchdog, recently accused Google of implementing anti-competitive advertising-search restrictions.

On top of all that, a privacy regulator in the United Kingdom (UK) alleged that Google’s proposed privacy policies don’t adequately protect users.

The point is that Alphabet has deep pockets and can manage some legal issues, but there’s a limit to what any company can handle. So, investors should continue to monitor these developments and understand that no company is invincible — not even a Magnificent member like Alphabet.

Take the Alphabet CEO’s Confidence With a Grain of Salt

It’s part of a chief executive’s job description to be the company’s cheerleader and hype man. Informed investors must always take a CEO’s confident declarations with a grain of salt.

A textbook example would be a statement from Alphabet and Google CEO Sundar Pichai. Without a doubt, Pichai would like investors to forget about the less-than-ideal rollout of Google’s Bard artificial intelligence chatbot, and instead focus on the newer iteration, known as Gemini.

Pichai’s role as a hype man is evident in his glowing description of Google’s Gemini large language models (LLMs):

“Gemini models are seen as leaders and keep getting better. And our successive breakthroughs have put us on a path to deliver the world’s most advanced, safe, and responsible AI.”

Meta Platforms (NASDAQ:META) CEO Mark Zuckerberg would undoubtedly disagree with Pichai’s ultra-confident statement. He described the recently upgraded Meta AI chatbot as “now the most intelligent AI assistant that you can freely use.”

Frankly, Pichai’s confidence won’t be enough to fend off Meta Platforms’ serious threat to Google in the AI-tech arena. Meta Platforms introduced Llama 3, an AI large language model, not long ago.

Gemini may be quite robust and powerful, but the same could be said about Llama 3. Only time will tell how well Google matches up against fierce rivals like Meta Platforms in the AI arms race.

Alphabet Stock: Keep the Company’s Issues in Mind

We’re not on a mission to dissuade you from investing in Alphabet, if that’s what you want to do. Just be aware of the company’s issues and challenges. Alphabet has to deal with ongoing legal/regulatory pushback and relentless competition from the likes of Meta Platforms.

So, be sure to temper your confidence with due consideration. When all is said and done, Alphabet stock earns a “B” grade today and may be appropriate for a moderately sized position in your portfolio.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.