Should I Sell My Google Stock After US Antitrust Lawsuits?

🌟🌟🌟Google $Alphabet(GOOGL)$  $Alphabet(GOOG)$  share price has dropped 4.7% on Thursday trading and is now down 3.5% for the past 5 days.  This was due to news that the US Department of Justice (DOJ) urged a federal judge to push Google to sell its Chrome browser and force its Android smartphone software to stop favouring the Google search engine.

Should I be worried and sell my Google stock?

While the measures proposed by the DOJ sound punitive, nothing is certain at this point since the case may take years to be finalised and Google will have the opportunity to appeal and present its view.

Google shares have pulled back for 3 consecutive trading sessions, making it the most  undervalued member of the Magnificent 7.   Google's current Price/Earnings ratio (P/E ratio) is currently 22.24 while Nvidia's P/E ratio is 68.89 and Tesla's P/E ratio is 93.  That is certainly a steep discount for Google. 

Google has an excellent Q3 24 Earnings report.  For the quarter Google's revenues increased by 15% year over year to USD 88.3 billion, reflecting strong momentum across the business. 

Google Services revenue increased 13% to USD 76.5 billion, led by strength across Google Search, Google subscriptions, platforms, devices and YouTube ads. 

Google Cloud revenues increased 35% to USD 11.4 billion, led by accelerated growth in Google Cloud Platform across its AI Infrastructure, Generative AI Solutions and core Google Cloud Platform products. 

Total operating income increased 34% and operating margin expanded by 4.5% to 32%.

Net Income increased 34% and Earnings Per Share increased by 37% to USD 2.12.

According to CEO Sundar Pichai, the momentum across the company is extraordinary.  Google's commitment to innovation, its long term focus and investment in AI, are paying off with consumers and partners benefiting from its AI tools. 

In Search, Google's new AI features are expanding what people can search for and how they search for it.  In Cloud, Google's AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals.  YouTube's total ads and subscription revenues surpassed USD 50 billion over the past 4 quarters for the first time. 

Google generated strong revenue growth in the quarter and its ongoing efforts to improve efficiency helped deliver improved margins. 

In April 2024, Google announced its first ever dividend of 20 cents per share.  Google announced another quarterly dividend of 20 cents in Q3 24.   The current dividend yield is 0.48%.

I am happy that Google has rewarded me with dividends.   Google has also bought back USD 15.3 billion worth of its own shares  in Q3 24 which is part of its plan to see a total of USD 70 billion spent, to bolster shareholder returns. 

I have invested in Google since 2022 and in that time I have seen its share price dropped below USD 100 but I have held on believing in its growth.  

Google hit a 52 week high of USD 190.92 in July 2024 and comparing it to its current closing price of USD 167.63, that is a drop  of 13.8% from its current price. 

Wall Street Analysts are still bullish on Google with a Strong Buy rating, Average Target price of USD 207.75, an upside potential of 23% according to Tipranks. 

Should I Sell My Google Stock now?  That is a Big NO from me.  In fact I may buy more Google shares as it is on sale.  Google has a wide moat in its Search engine business with over 90% market share.  It also has strong revenue streams from its various business segments which include its Cloud business.  Its AI push will pivot Google to stay strong and competitive well into the future. 

As Warren Buffett likes to say When there is Fear in the markets it is time to be greedy.   Buy Wonderful Companies like Google  at a Fair Price and my favourite holding period is Forever. 

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