Alphabet's stock is facing significant negativity from investors due to threats from AI advancements, economic challenges, and government scrutiny. Despite these concerns, the stock is priced lower than usual, presenting a potential buying opportunity. AI poses a challenge to traditional search engines, but Alphabet is adapting by incorporating AI into its services. The company's advertising revenue, especially from Google search, remains robust, with revenue rising year over year. While economic uncertainty abounds, Alphabet's undervaluation makes it an intriguing prospect for potential investors looking for long-term gains.
All three of these could spell trouble for Alphabet, but I still think that these concerns aren't enough to warrant Alphabet's dirt cheap stock price.
AI is obviously one that investors are worried about, especially when high-ranking managers from Apple testify that they believe traditional search engines will be replaced by AI.
To think that Alphabet's management is completely blind to this threat is a mistake, and they're combating it by promoting AI search summaries at the top of results.
Moving to general advertising revenue, Alphabet is incredibly dependent on this revenue stream. In Q1, 77% of revenue came from advertisements.
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