Last year, analyst Joseph Bonner — an analyst with Argus Research — chose Alphabet (GOOGL) as his top idea for the year; the shares rose 70 last year; Argus Research analyst again selects the stock as his 2022 Top Pick.
Alphabet is one of the big tech companies that continually innovates in mobile, public cloud, and big data analytics, as well as emerging areas such as artificial intelligence, virtual/augmented reality and even quantum computing.
Alphabet’s Google division dominates the digital advertising market, a market that continues to experience strong secular growth.
While Alphabet has often been criticized as a Johnny one note for its dependence on digital advertising, the powerful ramp-up in digital advertising as economies have reopened, combined with Google's dominant position, has certainly been a financial plus that shows little sign of weakening.
Although autonomous vehicle technology is at too early a stage for mass consumer adoption, Alphabet is further along in the testing phase than any of its competitors.
With success, growth, and size come anti-trust concerns in the U.S. and globally. We think that the current antitrust cases are serious, though it will probably take years for them to play out, and they may be difficult to prove in court.
Alphabet's recovery from the 2Q20 COVID-19-induced advertising slump has been remarkable. We see continued momentum in the coming quarters as e-commerce and digital advertising have burgeoned with economic recovery. GOOGL shares appear attractively valued given the company's rapidly expanding businesses. Our 12-month target price is $3,100.