Tech giant Alphabet (GOOGL) landed a pretty hefty win with the new year’s arrival, especially when you consider the wider landscape. Thanks to its Waymo service, Alpbabet is proving a winner in the self-driving vehicle stakes, which has already seen major automakers step back from the field altogether. The news did not light much fire under investors, though, as shares were only up fractionally in Thursday afternoon’s trading.
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Waymo is perhaps the first self-driving car provider to land “mainstream adoption,” noted a report from CNBC. In fact, that same report suggested that the United States has “…never been closer to a driverless future” as a result, and that Waymo has even “…made strides toward commercial viability.”
The driverless car market has not been a smooth one, or easy to manage, since its inception. It has already largely claimed General Motors (GM) as a failure following the ongoing disaster that was Cruise. Several others have dropped out in the meantime, leaving Waymo largely by itself except for gaining competitors from Amazon (AMZN) and Tesla (TSLA). But with reports suggesting that the ride-sharing market worldwide will hit $480.09 billion by 2032, it is clear that this market represents a major potential win.
Analysts Turning on It
But there is growing concern in the analyst field that Alphabet may be reaching some critical limits. Citizens JMP analyst Andrew Boone recently offered a note that downgraded Alphabet from Market Outperform to Market Perform, noting that there is a rising risk of antitrust penalties that could “significantly impact” revenue in the United States. Specifically, Google’s access to the search market’s revenue. With changes about to hit at the Department of Justice with the incoming Trump administration, though, that may further destabilize things.
Further, Boone notes that investors are not especially interested in paying current prices to own Alphabet stock, and will rather be “…in a wait and see mode” according to Barron’s. Current remedies to the Department of Justice decision have been advanced, but it is unclear as yet just which will be the one required.
Is Alphabet a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 23 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 37.57% rally in its share price over the past year, the average GOOGL price target of $212 per share implies 11.78% upside potential.
