December 1, 2023

Tyna Woods

Technology does the job

Risk of investing in Nasdaq GOOG stock

Risk of investing in Nasdaq GOOG stock

The alphabet can do nothing against some macroeconomic crosswinds. The company can’t do anything about the fact that (AMZN) exists and is attacking the company in all directions. Hence, you should also think before becoming overweight on the stock. At the same time, some experts raised their voice as Google manages around 85% of the market share of search queries in the United States and more than 90% around the world. In this way, Alphabet gained a monopoly in the search advertising industry, and the US Department of Justice claims that GOOG  uses its advantages to prioritize its own products in search results.

As Big Tech is subject to regulatory scrutiny, litigation will herald the success of future cases. Finally, although GOOG shares certainly do not seem to be seriously overvalued. We can say this by looking at the price to earnings ratio in stock trading which just exceeds 30 times. This price to earnings ratio seems good to us. However, there is no obvious catalyst for the company. As global economic growth slows and the yield curve flattens to point to future problems, the timing does not seem appropriate for GOOG’s potential shareholders.

Risk of Nasdaq GOOG in the present scenario

In the present scenario, the risks of Nasdaq GOOG are twofold. These two sections are Competition for market share in the mobile market and advertising. There are some questions raised on the monopoly of search engines. For example, according to the view of the US Department of Justice, Alphabet paid Apple a huge amount of money to make Google the default search engine for devices. Hence, according to the department, as GOOD is running Apple iOS as the default search, thus NASDAQ GOOG prevents other search companies from gaining market share.

At the same time, Alphabet has a large market share on Android devices, and the default search engine for Android devices is, of course, Google. This combination gives Alphabet an extremely strong position in mobile research. Another risk of investing in Nasdaq GOOG is the Ministry of Justice has found that these practices are anti-competitive. Hence, these factors will affect the search engine market share of the company. 

In that case, the advertising revenue also reduces in the near future. However, the company believes in sustainable development. If you stick to it for a long time and want to own one of the most convincing companies in the technology sector, then buying Nasdaq GOOG now is to give you peace of mind. In that case, you can add more Nasdaq GOOG stock to your portfolio. You can check the Goog income statement at before investing.