Alphabet Stock Bargain: Google Parent Has Lowest Valuation Among Magnificent 7 Stocks

Google parent company, Alphabet Inc. GOOG GOOGL finds itself at the center of attention for more than just its search engine prowess.

The stock is trading at its lowest valuation compared to its peers within the Magnificent Seven — a group of leading tech giants including Tesla Inc, Nvidia Corp, Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Apple Inc.

Alphabet, over the past month, saw its stock dip by 13.24% due to an ongoing antitrust lawsuit.

U.S. District Court Judge Amit Mehta moved the lawsuit into the remedy discovery phase. This indicates potential changes Google may need to enact are under review.

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This lawsuit targets Alphabet's search distribution agreements with major partners like Apple, Android OEMs, and third-party browsers, as detailed by JPMorgan analyst Doug Anmuth.

Anmuth highlights that these contested contracts could represent up to approximately 25% of Google’s Search revenue or around 15% of Alphabet’s total revenue.

Despite these legal hurdles, bullish investors see an opportunity for what many consider a bargain entry point. The current forward P/E multiple of 21.42 is the lowest among the Magnificent Seven, signaling a potentially undervalued opportunity for investors looking for growth in the tech sector.

Alphabet’s Peers

• Tesla’s stock trades at a forward P/E of 82.96
• Nvidia at 38.59
• Microsoft at 30.56.

Alphabet’s stock not only offers a more attractive valuation but also positions itself as a more stable bet within the volatile tech landscape. Its stock's market capitalization of $2 trillion and a 52-week price range from $121.46 to $193.31 add to its allure.

As Google navigates legal challenges, its current stock valuation might just be the golden opportunity investors have been waiting for.

GOOGL Price Action: Alphabet stock was trading at $162.10 at the time of publication.

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