As Alphabet (NASDAQ: GOOGL) navigates an operational environment dominated by legal uncertainty stemming from antitrust issues, some analysts on Wall Street view this aspect as bearish for the company, leading to a recent adjustment of the firm’s stock.
Specifically, in an investor note on October 14, Goldman Sachs (NYSE: GS) adjusted its outlook on Alphabet, citing ongoing concerns regarding the technology giant’s legal and competitive landscape.
The bank’s analyst, Eric Sheridan, highlighted two significant U.S. Department of Justice antitrust lawsuits that Google faces, emphasizing the potential implications for the tech giant’s revenue if it loses its exclusive position as the default search engine on platforms such as Apple (NASDAQ: AAPL) devices and non-Google Android systems.
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Sheridan stressed that losing these distribution points could notably impact Alphabet’s projected 2026 consolidated gross revenues and earnings before interest and taxes (EBIT).
The expert also reviewed Alphabet’s competitive advantage in the artificial intelligence (AI) sector, praising its broad integration of AI solutions across desktop and mobile applications.
He expressed confidence in the firm’s ability to leverage AI across its product ecosystem, a factor he believes investors ‘underappreciate.’
Despite concerns that regulatory and competitive challenges may continue to limit investor sentiment, Goldman Sachs considers Alphabet’s current valuation to already reflect these headwinds. Therefore, the analyst adjusted his GOOGL price target to $208 from $217 but maintained a ‘Buy’ rating for the equity.
“While we are cognizant that the multiple investors are willing to pay may continue to be capped due to the uncertainty around many of the matters discussed in this note, we see Alphabet’s current valuation as already pricing in notable headwinds. We reiterate our Buy rating and lower our PT from $217 to $208,” Sheridan stated.
Alphabet’s legal troubles
As a reminder, in a filing on 8 October, the Department of Justice proposed several sanctions against Google to reduce the company’s search engine market dominance.
The government is pushing for solutions such as ending Google’s exclusive agreements with companies like Apple and Samsung and prohibiting certain kinds of data tracking. Meanwhile, through CEO Sundar Pichai, Alphabet has vowed to fight to retain its normal operations.
To this end, experts at Bank of America (NYSE: BAC) believe GOOGL has more upside potential despite the case, setting a ‘Buy’ rating with a target of $206 in a note on October 11.
According to the bank, although the case is weighing down the stock, the authorities’ proposed remedies align with investor expectations. They further projected that investors should expect more twists and turns in the case but maintained the tech firm is well-established in the search engine market.
Further, a consensus of Wall Street analysts who see the stock trading above $200 in the next 12 months shares the upside potential of GOOGL’s share price.
On the other hand, Wedbush analyst Scott Devitt believes GOOGL could strengthen its position in generative AI. Scott shared his outlook after the Google Gemini at Work event on September 24 and noted that the company’s variety of AI use cases could boost investor confidence.
“We come away from the keynote with increased conviction in the strength of Google’s enterprise generative AI offerings and their emerging contribution to Google Cloud growth. Google is actively working with enterprise customers to develop AI agents across a variety of use cases,” Scott said.
Google stock price analysis
At the close of the last trading session, GOOGL was valued at $164.52, ending the day up 0.8%. However, the stock extended losses on the weekly chart, dropping almost 3%. The equity exhibited strength in the pre-market on October 14, gaining by 0.37%.
With the current valuation, GOOGL is trading slightly above its 50-day and 200-day simple moving averages, indicating stability around its recent price trends. With a relative strength index of 44.63, the stock is in neutral territory, showing neither overbought nor oversold conditions, reflecting balanced market sentiment.
Stock trading expert Jon Markman observed in an X post on October 10 that Google’s stock is hovering near the 200-day moving average, often considered a key support level for price stability. After peaking earlier this year, the stock has retraced from its highs, offering what could be a compelling entry point for those looking to capitalize on the company’s long-term growth potential.
He noted that the stock’s stability at the current levels could be an opportunity for investors. Google’s diversified business model could further add to its long-term appeal, especially if the company is broken apart as the government requires.
