Mountain View, California-based Alphabet Inc. (GOOG) is a multinational technology conglomerate holding company offering various products and platforms. With a market cap of $2.2 trillion, GOOG provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.

Shares of this internet media giant have underperformed the broader market considerably over the past year. GOOG has gained 22.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.1%. In 2024, GOOG’s stock rose 20.1%, compared to the SPX’s 24.7% rise on a YTD basis. 

Narrowing the focus, GOOG’s underperformance is apparent compared to the Invesco NASDAQ Internet ETF (PNQI). The exchange-traded fund has gained about 36.9% over the past year. Moreover, the ETF’s 28.5% gains on a YTD basis outshine the stock’s returns over the same time frame.

The recent underperformance of GOOG can be attributed to a request from the U.S. Justice Department (DOJ) for Alphabet to divest its popular Chrome web browser as part of an ongoing antitrust case. This move highlights increasing regulatory pressure on Alphabet and it can have significant implications for its business and reputation. Additionally, the rise of artificial intelligence (AI) and chatbots presents challenges for Google's future. With potential increased competition in search advertising, Google may face a loss of its long-standing advantage in the market, posing challenges for investors who have seen it as a promising growth stock.

On Oct. 29, GOOG shares closed up more than 1% after reporting its Q3 results. Its revenue stood at $88.3 billion, up 15.1% year over year. The company’s EPS increased 36.8% year over year to $2.12. GOOG surpassed Wall Street estimates on both EPS and revenue.

For the current fiscal year, ending in December, analysts expect GOOG’s EPS to grow 38.1% to $8.01 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.

Among the 50 analysts covering GOOG stock, the consensus is a “Strong Buy.” That’s based on 40 “Strong Buy” ratings, three “Moderate Buys,” and seven “Holds.” 

This configuration is more bullish than a month ago, with 38 analysts suggesting a “Strong Buy.”

On Nov. 6, Loop Capital kept a “Hold” rating and raised the price target on GOOG to $185, implying a potential upside of 9.3% from current levels.

The mean price target of $210.31 represents a 24.3% premium to GOOG’s current price levels. The Street-high price target of $240 suggests an ambitious upside potential of 41.8%.