Deep Dive: Alphabet Inc. ($GOOG)
Poised to win.
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Here’s an interesting thought experiment:
The most common question that I get on Rebound Investing is whether “X” company will ever go down in value, given its incredible moat and bullish investor outlook. Investors are worried about waiting for a pullback and missing the bus.
But data tells a different story.
40% of the top 50 companies in the S&P 500 will undergo a 50%+ drawdown over the next 10 years. — Market Sentiment Research
In most cases, the drawdowns are not driven by dropping fundamentals but by investor sentiment.
The latest example of that was Google.
While the company is now trading at ATHs, just a few months back, the story was very different. Investors were worried that Google had lost the AI race, Sundar Pichai was an ineffective CEO, and ChatGPT would take away all of Google’s ad-search revenue.
Investors were worried despite Alphabet’s advertisement revenue and profits growing consistently.
We at Rebound Capital had been tracking Google since June, and all the rebound catalysts we predicted then have played out exactly as expected.
Even with the stock trading at an ATH, Alphabet is still undervalued based on my estimates.