Buy The Dip In Google Stock: Alphabet Inc (NASDAQ:GOOGL)

Alphabet Inc (NASDAQ:GOOGL) looks well on course to $1000 mark. Any pullback in Google stock is a good buying opportunity.

Shares of search giant Google’s parent company Alphabet Inc (NASDAQ:GOOGL) have been on the upward march since its impressive Q1 earnings until yesterday. 2017 has been a good year for GOOGL stock till now with YTD gains of near 19% compared to dismal 2% returns in 2016. Shares of Mountain View, California-based tech company have rallied since the beginning of the last month after the negative sentiments from the YouTube controversy dwindled. Investors would be looking at good entry points to go long on the stock. Google stock is one of the few stocks which even the iconic value investor, Berkshire Hathaway (NYSE:BRK.A) CEO Warren Buffet admits that he made a mistake by not buying the stock. Now, the latest announcements at Alphabet Inc’s principal subsidiary’s annual developer conference suggest that the stock could be in for exciting times ahead.

GOOGL stock closed near 2.5% down, yesterday, May 17. Technicals suggest that the stock could be in for little more correction before resuming its uptrend. We had earlier highlighted the tech giant’s shares were long due for a correction. In the last trading session, the Moving Average Convergence Divergence (MACD) indicator for Alphabet stock made a bearish crossover with the signal line. The MACD line fell below the signal line in a bearish move. Further, the current measure of Relative Strength Index (RSI) indicator at 72.31 is still above the overbought threshold of 70. The previous RSI value was as high as 90.34. A pullback in Alphabet shares could indeed be a good buying opportunity. If you’re a technical analyst or trader, check out our latest section dedicated to daily trading ideas based on technicals.

Some I/O event announcements suggest Google is set to boost its core search business.

At its annual I/O developer conference, Google has launched its Google assistant for iPhone through a dedicated app, but one cannot replace Siri with Google assistant. However, this could go a long way in driving more growth in the company’s core search business. In the Q1 earnings call, Ruth Porat, Alphabet’s CFO had pointed out that “The biggest contributor to growth again this quarter was mobile search, reflecting the secular shift to mobile due to the greater utility of smartphones for users and advertisers.” Google assistant on iPhones could further boost mobile search on iPhones which could eventually translate into more revenue for the search giant.

Google CEO Sundar Pichai had announced a jobs search engine in the U.S yesterday. It is called “Google for Jobs” which will let you search for jobs in your area. The tech giant is not competing with the traditional job search service providers but partnering with them. The search listings would be pulled from sites like LinkedIn, Facebook (NASDAQ:FB), Monster, Glassdoor and CareerBuilder, and others. A Business Insider post states that “it’s a new way for Google to make money by indexing their information, while also providing those same outside companies with a new source of job-seekers to peruse their listings.” This is another good move to expand its core search business which has been delivering double-digit revenue growth through its search ads network.

Thinking beyond ads, Google prepares to dominate the future.

Google’s announcements at its latest annual I/O developer conference gives a clear hint that the company is trying to move beyond advertising. The tech behemoth plans to build an Artificial Intelligence (AI) based future. Google is releasing tools to help app makers to use AI in Android apps and hopes to steal the march over rival Apple’s (NASDAQ:AAPL) iOS mobile operating system using AI. Google also stated many initiatives revolving around its in-house designed AI specific TensorFlow chips. Some key announcements regarding the monetization aspects of its products like photos app were also made. Google has made a move in all the major emerging technologies to be well prepared for the future from VR to voice assistants, to AI and cloud. Ahead of the I/O event, Google added various new services to its cloud platform. Though Amazon’s (NASDAQ:AMZN) AWS still remains the market leader in the public cloud market, Google’s cloud platform grew much faster than the overall market and AWS in Q1 2017.

Alphabet Inc’s Google continues to dominate digital ads business. 87% of first-quarter revenue came from ads compared to 90% in the year-ago quarter. Sundar Pichai believes that the cloud platform would soon drive more revenues for the search giant with the company’s lead in AI. The technology titan is aggressively pursuing different business models to maintain its hypergrowth story.

Putting it all together.

Alphabet Inc-C (NASDAQ:GOOG) posted strong Q1 earnings maintaining its double-digit growth. The latest I/O announcements clearly suggest the tech conglomerate is well prepared to dominate the future and is headed in the right direction. Apart from all the above factors, Alphabet has a great catalyst in the form of its self-driving car division, Waymo. With automated driving market picking up great pace and set to become multi-billion dollar market soon, Waymo is well placed to capture that. A recent California DMV annual autonomous vehicle disengagement report states that Alphabet Inc’s Waymo cars are failing at a much lower rate, even as they are driving a whole lot more miles. Waymo recently reached 3 million miles of self-driving on public roads and the last 1 million miles came in just 7 months. Google stock is a good long-term bet. Some latest analyst price target updates put the target as high as $$1100 a share which would mean more than 16% upside from the last close. The recent dip could be a good opening to go long.

Alphabet stock is also one of our top stock picks from the technology space, which have outperformed the NASDAQ by an impressive 132%. In case you are interested in top stocks from the auto sector, do check out our top auto stock picks, which have beaten the S&P 500 by a whopping 184%.