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Emerging Dangers That Can Derail Google
AlphabetAlphabet(US:GOOG) Forbesยท2025-10-16 11:50

Group 1 - Alphabet (GOOGL) stock has experienced significant volatility, with a decline of over 30% in less than 2 months in 2022, resulting in billions lost in market capitalization [1] - Antitrust regulations pose a threat to Alphabet's operations, with the US DOJ winning cases related to ad tech and search monopolies, leading to remedies such as ending exclusive contracts and data sharing [5] - The introduction of AI Summaries in May 2024 has led to a decrease in publisher traffic by 34.5% to 54.6%, impacting the $175 billion annual search ad revenue [5] Group 2 - Alphabet's revenue growth is reported at 13.1% for the last twelve months (LTM) and an average of 10.2% over the last three years, with a free cash flow margin of nearly 18.0% and an operating margin of 32.7% LTM [6] - The stock is currently trading at a P/E ratio of 26.3, indicating a higher valuation compared to the S&P, along with increased revenue growth and superior margins [6] - Google Cloud revenue surged by 35% to $11.4 billion in Q3 2024, although it holds only 10-13% of the market share, trailing behind Microsoft Azure [5] Group 3 - Alphabet's stock has shown vulnerability during major market downturns, with declines of approximately 65% during the Global Financial Crisis and about 44% during the Inflation Shock in 2022 [7] - The Trefis High Quality Portfolio, which includes 30 stocks, has consistently outperformed benchmarks across the S&P 500, S&P mid-cap, and Russell 2000, providing superior returns with less risk [8]