JMP maintains Alphabet stock Market Perform amid anti-trust concerns

On Friday, JMP analysts maintained a Market Perform rating on Alphabet Inc. (NASDAQ:GOOGL), highlighting the potential impact of an upcoming anti-trust penalty on the company’s financial performance. The analysts noted that Alphabet’s stock is currently trading at 16.5 times their projected 2026 GAAP earnings per share (EPS) of $9.85, which represents a discount compared to the S&P 500 price-to-earnings (P/E) ratio.

Despite this discount, the analysts expressed caution due to the anticipated anti-trust penalty that Google, Alphabet’s principal subsidiary, is expected to face later this year. They suggested that this penalty might pose a downside risk to their earnings estimates for the tech giant. However, InvestingPro data reveals the company maintains robust financial health with a "GREAT" overall score of 3.23, supported by strong revenue growth of ~14% in the last twelve months.

The analysts’ stance reflects a careful consideration of the potential challenges Alphabet may encounter as it navigates through regulatory scrutiny. Their assessment indicates that, while Alphabet’s shares might seem attractive compared to the broader market, the looming anti-trust penalty could offset this advantage.

Alphabet Inc. has been under the microscope of regulators for some time, with concerns about its market dominance and business practices leading to increased regulatory pressure. The expected anti-trust penalty is a significant factor that could influence the company’s future earnings and market valuation.

Investors and market watchers are keeping a close eye on Alphabet’s regulatory developments, as any significant penalties could have an impact on the company’s financial health and stock performance. The maintenance of the Market Perform rating by JMP suggests a wait-and-see approach as these issues unfold.

In other recent news, Lockheed Martin (NYSE:LMT) has announced a collaboration with Google Cloud to integrate advanced artificial intelligence capabilities into its AI Factory ecosystem. This partnership aims to enhance Lockheed Martin’s capacity in areas such as national security and aerospace by utilizing Google’s AI technology. Meanwhile, Google has made a significant change to YouTube Shorts, aligning its view-counting metrics with those of competitors TikTok and Instagram, effective March 31, 2025. This update is designed to give creators a more accurate understanding of their content’s reach without affecting earnings or eligibility for the YouTube Partner Program.

In the advertising sector, UBS has revised its growth forecast for digital ad budgets, reducing it to 4.5% from an earlier projection of 9%. This adjustment reflects a shift in spending patterns among clients in sectors like retail and travel. Additionally, Cantor Fitzgerald has maintained its Overweight rating on Alphabet, with a price target of $200, despite identifying risks related to the ongoing Search trial and macroeconomic factors. The firm believes Alphabet’s growth prospects justify these risks.

Lastly, the European Union is reportedly planning to impose minimal fines on Apple (NASDAQ:AAPL) and Meta (NASDAQ:META), aiming to avoid escalating tensions with former President Donald Trump. These developments underscore the evolving landscape in technology and advertising, as companies navigate regulatory and economic challenges.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.