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A couple of weeks ago, investors were celebrating the overall rally in the wake of the US presidential election. However, a few days later the markets cooled, showing investors a potential rotation of themes from a potential resurgence of inflation very quickly to what could look like a recession. The camp remains divided between recession and the return of inflation.

Alphabet today

$179.58 +2.78 (+1.57%)

(As of 11/19/2024 ET)

52 week range

$129.40

▼

$193.31

Dividend yield

0.45%

P/E ratio

23.82

Target price

$200.56

Investors must position their capital wisely to navigate any scenario, increasing their chances of a favorable outcome. While the technology sector, with its rally and historical volatility, may seem attractive, one stock stands out from the rest today.

This stock Alphabet Inc. NASDAQ: GOOGLE. While some would call it expensive based on the valuation multiples it trades at today, its fundamentals and business model promise a better future and stability no matter which of the two scenarios (inflation or recession) plays out for the rest parts of the economy.

Reason #1: Why Google Stock Will Outperform Inflationary Pressures

If the economy results in inflation, businesses in general, especially mid-sized businesses, will see their profits fall due to rising costs and will be thinking about how to get back to normal. To achieve this, a certain level of outsourcing and automation is required.

This is where Google stock comes into play. It offers business solutions at manageable prices, from advertising to storage to customer relations. There is also the office part and document management, which directly competes with Microsoft Inc. NASDAQ: MSFT and the Office product line. However, Google is better at targeting mid-sized businesses than large corporations.

Knowing that the advantage of Google’s customer demographics is that they will act as a tailwind when and if inflation hits, as larger corporations can easily diversify their spending by expanding into international markets and operations.

Reason #2: Google’s Value Proposition Outperforms Competitors Even in a Recession

What about a recession? Wouldn’t this be bad for everyone? Well, not for Google, especially when investors are following the same talking points and themes that help businesses fight inflation. The reason is that as a recession sets in and business activity declines, profitability will be more important than ever for business survival.

This also calls for an affordable and effective offering from Google services, where mid-market businesses can turn to Google to ensure sustainable profits and keep their business running adequately during challenging times.

While these two reasons are fundamental, they are only part of the picture. Investors should consult Wall Street analysts and other market participants to determine whether these beliefs are widely accepted and accepted.

Wall Street’s Take on Google Stock: Analyst Sentiment and Market Outlook

Price action is one of the most obvious indicators of whether the market is bullish or bearish on a stock. Google shares are now trading at 91% of their 52-week high, showing investors that the company has momentum, and for good reason.

Investors can then check Wall Street ratings for further guidance, especially from Pivotal Research, whose analysts recently reaffirmed their Buy rating on Google stock and also set a $225 price target for the company this time around.

To prove these goals right, the stock would need to rise as much as 28.4% from where it is trading today, not to mention a new high for the year. And if valuation multiples were the only thing that mattered, short sellers would be happy to raid this “expensive” name, but that’s not the case today.

Google’s short interest has declined 6.2% in the past month alone, signaling a bearish capitulation in the face of the growth potential inherent in today’s business model. Ultimately, institutional investors were happy to pick up where these runaway bears left off.

Geode Capital Management executives have decided to increase their Google shares by 2% through November 2024, bringing their net position to a high of $22.1 billion today and giving investors another sign of the further momentum that Google will soon have, regardless , which of In the end, two economic scenarios will be realized.

Before you consider Alphabet, you should hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and Alphabet wasn’t on the list.

While Alphabet is currently being rated a Moderate Buy by analysts, the top-rated analysts rate these five stocks as Strong Buys.

View five stocks here

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