Wedbush's recent reevaluation led to the removal of Wingstop and Cheesecake Factory from its Best Ideas List, primarily due to an analyst departure. In contrast, Alphabet's removal reflects investor concerns about the impact of artificial intelligence on its business model, even as the firm maintains a long-term positive outlook. Alphabet's shares have seen considerable volatility, trading lower than the S&P 500's average despite exceeding earnings projections. Analyst calls for a potential breakup of Alphabet add to the ongoing uncertainty.
"While we expect Alphabet will be able to prove it can withstand the emergence of a new technology, we anticipate that it will take time and potentially leave the shares at a discount to fair value."
"We believe Alphabet shares remain compelling on a long-term basis," the investment firm said in a May 12 note.
"Alphabet shares currently trade at less than 16 times estimated 2026 earnings, a discount to the slower-growing S&P 500 average of 19 times," Wedbush wrote.
The stock of the Mountain View, Calif., search, advertising and cloud-services giant is down 16.2% since January, and off 6% from a year ago.
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