What happened
Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) were up in March. The stock benefited from some analyst upgrades, the increasing risk that TikTok would be banned in the U.S., and the perception among some investors that the stock was undervalued.
According to data from S&P Global Market Intelligence, Alphabet stock finished the month up 15%. As you can see from the chart below, those gains came in the second half of the month. This was due to the run-up to the TikTok hearings and a recovery in the broad market following the collapse of SVB Financial's Silicon Valley Bank.
So what
There was no singular reason for Alphabet's gain last month. Rather, a variety of factors combined to send shares of the tech giant higher, especially after the stock had struggled earlier in the year with the increasing threat from Microsoft and ChatGPT.
Alphabet stock rallied the week of March 13 as stocks rebounded in the aftermath of the Silicon Valley Bank collapse and other news items, including a report from Bank of America showing that the increase in interest in Microsoft's Bing since its announcement that it would integrate ChatGPT features hasn't impacted Google web traffic or search download activity, which has been stable since November.
The stock gained later in the week, seemingly helped by Meta Platforms' second announcement of layoffs. Amazon also announced a second round of layoffs last month, which could also encourage Alphabet to do the same.
Finally, the stock seemed to get a tailwind from the TikTok hearings, as a number of politicians called for the popular Chinese social media app to be banned from the U.S. A ban or another type of regulatory crackdown would be bullish for Alphabet and the rest of the social media industry as TikTok is a threat to YouTube and Google Search, as Gen Z is increasingly using TikTok as a starting point for searches.
Now what
To close out the month, Alphabet stock jumped on March 31 as CFO Ruth Porat promised that the company would continue to cut costs, fulfilling hopes that the company would slash expenses further after it issued layoffs back in January. After last-month's gains, Alphabet stock now trades at a price-to-earnings ratio of 23, and analysts expect the company's earnings per share to decline in the first quarter before returning to growth later in the year.
Given the recessionary headwinds in the ad market and the challenges from Microsoft and ChatGPT, Alphabet stock seems to be fully valued after the latest gains.
10 stocks we like better than Alphabet
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Alphabet wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 8, 2023
SVB Financial provides credit and banking services to The Motley Fool. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Jeremy Bowman has positions in Amazon.com and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Bank of America, Meta Platforms, Microsoft, and SVB Financial. 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.
