Alphabet May Be the One Undervalued Magnificent Seven Stock
Google's parent company Alphabet may be a stock that is undervalued at the moment and could be an excellent investment.
Quick overview
- Alphabet's stock (GOOG) has rebounded from a low of $146 to $176.59, but some analysts believe it remains undervalued.
- The company reported Q1 2025 revenue of $50.7 billion, exceeding expectations, primarily driven by its dominance in search advertising.
- Despite competition from ChatGPT, which has rapidly gained users, Google is integrating AI into its search results to maintain its market position.
- With the stock currently 10% below its 2025 high and favorable economic conditions, there is potential for significant growth in Alphabet's stock.
As Google’s parent company, Alphabet (GOOG) is one of the big movers on the stock market, but this stock could still be priced below its value.
The Magnificent Seven stocks all took a hit this year as a result of President Donald Trump’s tariff actions. GOOG fell from $196 at the beginning of 2025 to $146 in early April when the tariff fears were at their worst. Now, Alphabet’s stock is back up to $176.59, and some analysts think it is currently undervalued.
This stock did not take the kind of hit that some of its tech rivals did, and that is partly due to how much less tariffs on technology would have affected the company compared to a company like Microsoft which deals more in physical goods.
Alphabet Q1 Performance and Competition
Alphabet has also managed to beat estimates for its revenue performance. For its first fiscal quarter of 2025, the company brought in $50.7 billion in revenue, which was above the predicted $50.4 billion. This revenue is primarily from search-advertising on the internet where Google dominates. How much longer the company will corner this market is debatable, since they have some strong competition coming from ChatGPT.
In May, ChatGPT boasted 800 million users, which was double the numbers from just two months prior. With more people using ChatGPT for searches online, Google may lose some of its market share and struggle to adapt. Google has integrated AI into its searches, providing its users with an AI summary of their search results at the top of the page and creating a direct competitor to ChatGPT.
How Might Alphabet Stock Be Undervalued?
Why do some experts think that Alphabet is undervalued for now? The stock price is currently 10% below its 2025 high, and with the current state of the economy, Alphabet may be able to regain that lost ground. Trump has placed a pause on many of his tariffs that would have affected Alphabet, and the stock market is at one of its strongest points in years. The stage is set for Alphabet stock to do very well over the coming weeks and months.
Even though this stock has been on the rise for the last week and has an overall bullish trend for the past few months, it could still climb higher. Investors looking for a steady, strong stock with a good track record could do much worse than GOOG.
Because this is one of the Magnificent Seven stocks that typically have a big impact on the course of the entire stock market, it is worth noting that the stock may be undervalued now. That leaves lots of room for growth and significant profits for traders that invest at this relative low point.
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