Alphabet shares plunged after disappointing earnings, but a veteran fund manager still sees reasons to be positive on the Google parent. The manager has revised the stock's price target following the sharp sell-off.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
GOOGLearningsvaluationinvestment trusts
Open a keyword to see other news on the same topic.
Related tickers and likely impact
GOOGL
• NeutralAlphabet Inc. (Class A)
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.0T |
| Close on 10/30/2026 | 279.76 |
| Change that session | -1.43% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Why Google (GOOGL) Offers Asymmetric Upside Potential?
Patient Capital Management's Q3 2026 letter highlights Alphabet (NASDAQ:GOOGL), along with Meta and Amazon, as among the most attractive opportunities in the market, citing 2027 P/E multiples of 21-24x and operating income growth north of 20%. These stocks have lagged the market this year after previously being top performers, but the fund believes their advantages in data, capital, technology and culture position them well in an AI-dominated future. It says Google and Amazon have clearly demonstrated strong returns on their AI investments, and Meta's Muse launch was a good start. Alphabet closed at $352.72 on October 12, 2026, up 2.24% over the past month and 43.70% over the past year, with a $4.29 trillion market cap, and ranks third among the 40 most popular hedge fund stocks. At the end of Q2, 275 hedge fund portfolios held GOOGL, up from 265 the prior quarter.
- 95% Upside for Reddit? B. Riley Thinks So, and Here’s How
Reddit (RDDT) shares fell another 25% after its third-quarter report and are 63% below their January high, even though revenue grew 53% in the quarter. U.S. daily users fell 2% from a year earlier to 50.7 million, and the company said search referral traffic fell meaningfully in Q3. B. Riley cut its price target to $190 from $270 and kept its Buy rating, a target 95% above the current price. That target equals about 22x the $8.54 per share in earnings analysts expect over the next twelve months, though the article notes those estimates could come down given shrinking U.S. users and the Google data-licensing renewal due in the first quarter of 2027.
- What it will take for Alphabet's low P/E ratio to rebound: AlphaSpace
Yahoo Finance's Brian Sozzi notes that Alphabet's P/E has fallen to its lowest level since 2012 after the company posted negative free cash flow of $9.1 billion in the quarter, versus a Wall Street estimate of negative $3.5 billion, and more than $500 billion in market value was erased in a single day. He argues earnings estimates have not bottomed, citing slowing search and YouTube. For the P/E to recover, he says estimates would need to rise, the market would need to believe earnings will reaccelerate around mid next year, or Alphabet would need to cut capex, and he does not expect this to happen in the near term.
- Alphabet Shares Plunge. Why Now Is a Great Time to Buy the Dip.
Alphabet shares fell after Q3 earnings as search revenue growth slowed to 12%, reaching $63.35 billion and missing the $64.96 billion estimate. The company cited currency swings, World Cup timing, the end of the EU de minimis exception and lower monetization of AI queries. Google Cloud revenue more than doubled to $30.7 billion, and cloud operating income more than tripled to $11.1 billion as margins rose from 23.7% to 36.2%. Total revenue rose 25% to $127.6 billion, while EPS fell 26% to $2.12, largely due to a paper loss on its SpaceX investment; adjusted EPS of about $2.67 still missed the $3.02 estimate. The author argues the stock trades at a forward P/E just above 18.5 times 2027 estimates and that the search issue is fixable.
- Could Alphabet Actually Climb 67%? Or Is Pivotal Research Totally Wrong?
Pivotal Research reiterated its Buy rating and $475 price target on Alphabet, 67% above Thursday's close, after third-quarter results sent the stock sharply lower. Google Cloud revenue rose 103% to $30.7 billion, but Search grew just 12% and free cash flow was negative $9.1 billion as capital spending reached $51.4 billion. Alphabet is funding the build by selling 36 million new shares for $12.4 billion and issuing $28.7 billion of notes, and it bought back no stock. The $475 target implies about 33x forward earnings, near the highest multiple in five years, and the author describes it as a best-case scenario. Alphabet's 2027 spending plan, due on its Q4 call, could change that view.
- Alphabet stock crash leaves this trading metric at a level not seen in more than a decade
Alphabet (GOOGL) shares fell 12.6% on Thursday after its earnings report, wiping out nearly $500 billion in market value, and dropped another 1% in premarket trading on Friday. Yahoo Finance AlphaSpace data shows its price-to-earnings (P/E) ratio is at a level not seen since 2012. Search sales of $63.4 billion came in below the $64.9 billion expected, fueling fears that rivals such as Claude and ChatGPT are eroding Google's search business. Negative free cash flow of $9.1 billion also missed the Wall Street estimate of negative $3.5 billion. After the report, 13 Wall Street analysts cut their price targets on Alphabet.
Related markets
Latest news
- Is Intel Stock a Buy After Its Post-Earnings Plunge?
Intel shares fell sharply after hours on Thursday, from a $92.07 regular-session close to about $71, following third-quarter results. Revenue rose 21% year over year to $16.5 billion and adjusted EPS of $0.52 beat guidance, but the fourth-quarter outlook of $15.0–16.0 billion in revenue and $0.25 in EPS was weaker. Data center and AI revenue jumped 78% to $7.3 billion, while PC-related revenue fell 5% to $8.1 billion. Intel expects PC segment revenue to drop over 20% next quarter as industry PC units shrink about 12% in 2026 and 10% in 2027, and an accident that shut its Fab 28 plant in Israel also weighs on results. The author judges it is not yet time to buy, given the stock trades near 33 times expected 2027 earnings and the diluted share count is expected to be about 20% above the third quarter of 2025.
- Elon Musk 'trolls' over Binance hack, CZ bluntly says: 'I deeply respect you, please stop'
Binance co-founder Changpeng Zhao (CZ) asked Elon Musk to stop 'trolling' the exchange after the SpaceX and Tesla CEO posted emoji that appeared to mock the cyberattack on Binance, which caused losses of 6.3 billion USD on October 29. CZ pointed out that Binance holds SpaceX shares worth over 1 billion USD, stemming from its 500 million USD investment in Musk's Twitter acquisition, though this is a tiny fraction of SpaceX's valuation of about 2,000 billion USD. The feud is not new: in November 2021, Musk called Binance's temporary suspension of Dogecoin withdrawals 'shady', and CZ responded by citing Tesla's recall of nearly 12,000 vehicles in the US.
- Jim Cramer says it's time to look beyond tech. Here are 4 consumer stocks he likes
CNBC's Jim Cramer said investors seeking to diversify away from the struggling AI trade should consider consumer staples stocks. In October the Nasdaq-100 fell almost 7% as money rotated into defensive sectors, while the consumer staples index rose 11.4%. Cramer highlighted four stocks: Kimberly-Clark (up nearly 11% in October, under 15 times earnings, 4.7% dividend yield, with a pending merger with Kenvue); Procter & Gamble (up 11%, seen as attractive after better-than-expected quarterly results, though he prefers Kimberly-Clark's lower valuation and higher yield); Constellation Brands (up 20%, about 11 times earnings, yield above 3%, showing signs of a turnaround); and Coca-Cola (up 9%, after a strong quarter driven by volume).
- Why Bright Horizons Family Solutions Stock Swooned on Friday
Bright Horizons Family Solutions (BFAM) stock fell almost 18% on Friday after the child care company cut its 2026 guidance. For the third quarter, revenue of nearly $841.5 million rose almost 5% year over year, and adjusted EPS of $1.80 beat the $1.76 analyst estimate, though revenue missed the roughly $842.7 million consensus. Full-year 2026 revenue is now expected at about $3.07 billion, down from almost $3.09 billion to just under $3.12 billion, and adjusted EPS guidance was lowered to $4.98–$5.03 from $5.05–$5.15. Management attributed the cuts to an ongoing UK regulatory safeguarding notice and a softening child care market in Australia, which prompted an internal review of strategic alternatives for that business. The article notes the stock looks cheap on valuation metrics but needs growth from its full-service centers and a resolution of the Australia situation to draw renewed investor interest.
- What Are Dell Investors Betting On?
A Trefis analysis says Dell Technologies (DELL) trades at 26.6 times adjusted earnings over the twelve months to July 2026, so buyers at that price are betting on much higher profit. Consensus forecasts put fiscal 2027 profit at $18.5 billion, versus $7.05 billion in fiscal 2026, and sales at $195 billion, up from $113.5 billion. Revenue grew 71% in the first half of fiscal 2027, and management raised its full-year sales guidance to $192 billion from $167 billion, with AI server revenue expected at $74 billion and a record $95 billion AI backlog. The main risk the article identifies is the net margin: consensus assumes 9.5% in fiscal 2027 versus 6.2% in fiscal 2026, while AI servers carry lower margins and Dell is supply constrained on DRAM and NAND memory chips. If Dell misses that margin, the article says investors would be paying for profit not yet shown over a full year, making the stock more of a gamble.
- Why CareDx Stock Soared Today
CareDx shares (CDNA) rose more than 22% on Friday after the medical diagnostics provider reported strong third-quarter growth. Revenue jumped 39% year over year to $139 million, driven by a 65% increase in testing services revenue to $119 million, while testing volumes climbed 51% to 75,900 after the July acquisition of cancer blood-test maker Naveris. Patient and digital solutions revenue rose 31% to $20 million, and EBITDA doubled to $30 million. For full-year 2026, CareDx now expects revenue to grow about 38% to $525 million and has raised its adjusted EBITDA target to $90–100 million from $66–78 million. CEO John Hanna said clinicians want actionable molecular information about patients' disease status to inform treatment decisions.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.