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Is the Alphabet Inc. share price a buy at current levels?

The Alphabet Inc. share price has gained roughly 40% in 2023 to help lead the Nasdaq and FANG Indices higher.

Source: IG

While Q1 2023 earnings were a sharp beat on consensus estimates, the share price of the company has been further supported by the announcement of a $70 billion share repurchase program. The share buyback announcement has helped instill investor confidence that last year’s selloff in the stock (and technology sector peers) has created a relative value in the current market environment.

A ‘golden cross’ suggests new bull trend for Alphabet Inc.

Source: IG

A daily chart of the Alphabet Inc. (all sessions) highlights that the 50-day simple moving average (50MA) (green line) has recently crossed above the 200-day simple moving average (200MA) (blue line). This moving average crossover is known as the ‘golden cross’, a suggestion that a new bull trend may be emerging.

Inversely, when the 50MA crosses below the 200MA the technical analysis term associated with the occurrence is referred to as the ‘death cross’. A death cross is a suggestion that a new long term bear trend may be emerging.
The chart above marks the ‘death cross’ occurrence on Alphabet in March 2022 with a black arrow and the current (May 2023) and previous (June 2020) ‘golden cross’ scenarios with the green arrows.

It should be noted that the ‘golden cross’ is considered a longer-term indication of trend. Short term traders might use this in determining a bias to trades i.e., looking for opportunities for long entry rather than short entry, while the longer-term trend is considered up (by these metrics).

Alphabet Inc. broker ratings and price targets

Source: Refinitiv

A Refinitiv poll of forty-nine analysts / brokers maintain a long-term average rating of buy for Alphabet Inc. (as of the 17th of May 2023), with sixteen of these analysts recommending a strong buy, twenty-nine recommending a buy and four recommending to hold the stock. There are currently no sell or strong sell recommendations on the company in the survey.

A median long term price target from these analysts arrives at a share price of $130.89, roughly 10% higher than the current share price (as of the 17th of May 2023).

IG client sentiment

Source: IG

The majority (88%) of IG clients with open positions on the Alphabet Inc. expect the price to rise in the near term, while 12% of clients with open positions expect the price to fall. The client sentiment indicator represents a snapshot of open positions as of 2pm (GMT) on the 17th of May 2023.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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