1 Wall Street Analyst Thinks Alphabet Stock Is Going to $200. Is It a Buy?

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has been on a tear lately as far as its stock is concerned. That's because it has many factors going for it, including good fundamentals, investor hunger for tech companies involved in artificial intelligence (AI), and the declaration of its first-ever dividend.

The company's share price has been hitting new highs lately. It could soar even higher, according to one analyst who raised his price target on the company's C class non-voting stock (the one bearing the GOOG ticker symbol) at the end of April. Is that view realistic, though?

A well-performing incumbent

That raise came from DZ Bank's Ingo Wermann, who now feels Alphabet's C shares are worth $200 apiece, comfortably up from the $175 at which he previously pegged them. He maintained his buy recommendation on the tech giant.

Wermann made his adjustment several days after Alphabet unveiled its latest set of quarterly results. The company posted double-digit increases in both revenue and net income. The top-line result easily topped the average analyst estimate, while profitability absolutely crushed it.

As ever, Alphabet's growth was powered by its near-unassailable search business; it's telling that a long-standing verb many use for internet search is the brand name of the company's core asset, Google. Alphabet is far from a one-act story, however -- its dominant YouTube video clip streaming site is also bringing in piles of revenue, and its cloud business is nothing to sneeze at.

Wide moat, vast potential

At this point, we have to consider Google search to be quite the economic moat for Alphabet, given the service's runaway prominence and popularity.

With that monster tailwind at its back, the company has vast resources to develop basically any other revenue stream it wants. One of the more promising ones is AI -- despite some recent hiccups with its efforts -- and it will surely identify and plow into others. So I think Alphabet's best days as a stock may still be ahead of it, and it's a safe bet that the share price will increase substantially before long.

Should you invest $1,000 in Alphabet right now?

Before you buy stock in Alphabet, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $544,015!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of May 3, 2024

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.