Alphabet has underperformed the market over the past three years primarily due to threats from antitrust lawsuits and competition from AI search services. The company retains a strong position in online search, digital advertising, and video through YouTube, while also benefiting from its profitable Google Cloud segment. Despite recent underperformance, Alphabet's stock appears inexpensive based on forward earnings estimates, with a P/E ratio significantly lower than competitors like Microsoft and Apple. Its solid cash reserves and profitability provide a buffer as the company adapts to industry changes.
Alphabet has long dominated online search, soaking up a huge chunk of digital ad spending as businesses vie for clicks, and YouTube accounts for nearly 10% of all U.S. TV viewership.
Despite solid revenue and profit growth, Alphabet stock has been lagging lately, underperforming the S&P 500 and losing out to tech giants like Microsoft.
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