Analysts Maintain Optimism on Alphabet Despite Search Business Concerns
Recently, Alphabet, the parent company of Google (GOOGL), experienced a significant market cap loss of approximately $150 billion amid fears regarding competition from AI-driven search alternatives. Morgan Stanley has identified this dip as a prime buying opportunity for investors.
Morgan Stanley notes that sentiments surrounding GOOGL have hit a low due to apprehensions about AI disruptions. This follows comments from an Apple (AAPL) executive who indicated that Apple plans to integrate AI-powered search into its Safari browser, potentially undermining Google’s status as the default search engine.
The firm argues that competitors like OpenAI and Meta (META) currently lack sufficient user bases or compelling products to sway Google users significantly. As a result, GOOGL shares saw a slight uptick of 2%, trading around $156 following a 7% drop the previous day. Morgan Stanley has maintained a price target of $185, urging investment.
Jefferies analysts highlighted that Google’s Chrome enjoys a 66% share of the browser market, while Safari accounts for 17%. Google is also making strides in AI, with its AI overview in Search reaching 1.5 billion active users monthly. They noted that while alternatives to Google Search are emerging, the company is not remaining idle.
Jefferies reinforced its price target of $200, deeming the recent stock sell-off excessive. Other firms like JPMorgan and Citigroup echoed similar sentiments with price targets of $195 and $200, respectively.
However, one pressing concern for Google remains antitrust actions. A federal judge confirmed last August that Google facilitates an illegal monopoly in the online search industry, with recent testimonies pointing toward a potential resolution to this issue.
Traders Anticipate Movement in Coinbase Stock Post-Earnings Release
Coinbase (COIN) is set to report its quarterly earnings after Thursday’s market close. Analysts predict a moderate stock movement, expecting a swing of around 6.5% in either direction on Friday.
Recent trends show that Coinbase shares could hit a two-month peak of approximately $217.50 or dip to about $191. Historically, the stock has fluctuated more than 9% following earnings reports over the past four quarters.
Analysts’ opinions are divided, with six out of twelve providing a “buy” rating while the others recommend holding. The average price target stands at $262.42, suggesting around 33% upside potential.
Currently, Coinbase shares are up over 6% as Bitcoin has surged past $100,000 for the first time since February, although the stock has forfeited over 15% of its value for the year.
Cryptocurrency Stocks Rally as Bitcoin Surpasses $100K
Cryptocurrency stocks experienced a boost as Bitcoin climbed above the $100,000 mark for the first time since February. Bitcoin was recently valued at $101,000, significantly up from an overnight low of around $96,000.
This increase is attributed to positive trade news between the U.S. and U.K., leading to overall gains in risk assets, including U.S. equities.
Shares of Coinbase (COIN) rose by 6%, while the Bitcoin buyer, known as Strategy (MSTR), increased by 7%. Bitcoin mining firms such as Riot Platforms (RIOT) and Mara Holdings (MARA) saw their shares climb by 7% and 8%, respectively.
Following earlier market struggles, Bitcoin has bounced back about 33% from its early-April low of $76,000.
Cleveland-Cliffs Stock Drops as Steelmaker Cuts Production
Cleveland-Cliffs (CLF) faced a major drop in stock value after announcing a reduction in production to enhance operational efficiency. The company plans to either fully or partially idle six facilities, anticipating over $300 million in annual savings.
Additionally, Cleveland-Cliffs will stop investing in a transformer production facility due to project changes that now fall short of its investment criteria. CEO Lourenco Goncalves mentioned that the company’s recent losses were driven by non-core assets and the impact of declining index prices.
For the first quarter, Cleveland-Cliffs reported an adjusted net loss of $0.92, with yearly revenue rising 7% to $4.63 billion, slightly above analyst expectations.
Following today’s significant declines, Cleveland-Cliffs shares have now lost about 25% of their value this year.
Anheuser-Busch InBev Stock Reaches 52-Week High
Shares of Anheuser-Busch InBev (BUD) surged to a 52-week high as the company reported a nearly doubled net profit to $2.15 billion for the first quarter, surpassing expectations significantly.
Despite a slight revenue increase of 1.5% year-over-year, the decline in beer sales volumes across various regions was balanced by cost reductions in selling, general, and administrative expenses.
CEO Michel Doukeris stated that the adherence to AB InBev’s strategic goals has produced a strong start to the year, boosting confidence for 2025.
Shopify Stock Plummets After Unexpected Q1 Loss
Shopify (SHOP) shares plummeted following a surprising net loss reported for the first quarter. The company recorded sales of $74.75 billion in gross merchandise value, falling short of analysts’ expectations.
Despite generating $2.36 billion in revenue, the unexpected loss of $0.53 per share caused concern. Shopify expects revenue growth of approximately 25% year-over-year for Q2.
Shares were down 6% in early trading, continuing a downward trend that has seen an 11% decline since the beginning of the year.
