Dan Ives Says Alphabet Just Scored a "Monster Win." But, After Double-Digit Gains, is it Too Late to Buy the Stock?

Key Points

• In an antitrust case against Alphabet, the worst outcome has been avoided.

• Even with the risk of this case weighing on Alphabet, the stock still has climbed over the past year.

• 10 stocks we like better than Alphabet ›

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has been a fantastic investment opportunity for investors over the years. The company owns the world's No. 1 search engine, Google Search, and generates revenue from its growing cloud computing unit Google Cloud as well as through the sales of equipment such as smartphones. This has helped the tech giant generate billions of dollars in earnings -- and the stock price has advanced more than 600% over the past decade, scoring a win for shareholders who have held on for the long haul.

But one thing in particular has prompted some investors to hold back on buying the stock, and that's a U.S. antitrust lawsuit. Last year, in the Justice Department's case against the company, a U.S. district judge ruled that Alphabet operates an illegal Internet search monopoly. To remedy the situation, the department recommended a breakup of Google -- and one of the possibilities was the sale of Google Chrome.

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Though Alphabet stock has advanced, the case still weighed on the stock's potential as some investors worried about a dismantling of the company's valuable search business. Last week, though, that worst-case scenario was avoided. In fact, Alphabet scored a "monster win," according to Wedbush analyst Dan Ives. Still, after Alphabet's double-digit gain this year, is it too late to get in on this top tech stock? Let's find out.

Image source: Getty Images.

Alphabet's antitrust troubles

So, first a quick look at the troubles Alphabet faced up until a few days ago. As mentioned, investors feared the technology powerhouse would have to break apart its Google unit, damaging its market position and growth prospects. Alphabet's ownership of an entire ecosystem of products and services allows it to operate more efficiently and share resources across these platforms, from Google Chrome to YouTube, for example.

On top of this, the idea of a breakup put into jeopardy Alphabet's deal with Apple that's allowed Google to be the search engine of choice on the iPhone. It's important to remember that Alphabet's Google Services business represents 85% of revenue -- this is thanks to advertising across Google platforms -- so any potential disruption of its current form could be highly destructive.

That's why last week's court ruling was fantastic news for Alphabet shareholders: The court said Alphabet wouldn't have to divest Google Chrome or its Android operating system, and that "plaintiffs overreached in seeking forced divestiture of these key assets." Instead, Alphabet must share search data with its competitors to level the playing field.

Ives raises his Alphabet price target

Wedbush's Ives, a technology bull, said this is a "monster win" and "removes a huge overhang on the stock," according to a CNBC report. Ives also increased his price target on the stock, which currently trades for about $232, to $245.

So now let's return to our question: This is great news for Alphabet shareholders -- but if you haven't yet bought the stock or if you aim to add to your position, is it too late to buy? After all, even though the antitrust case might have put the brakes on share performance, the stock still has advanced nearly 50% over the past year.

Here, it's important to consider valuation. In spite of the gains, Alphabet trades for only 23x forward earnings estimates, making it the cheapest of the Magnificent Seven stocks.

The Magnificent Seven are a group of technology-oriented stocks that have driven overall stock market gains over the past couple of years.

GOOG PE Ratio (Forward) data by YCharts

What valuation suggests

This valuation suggests Alphabet still has plenty of room to run, even in the near term. And in the long term, there's even more reason to get excited about this company. Alphabet, thanks to the court ruling, now can continue to grow its search business, and on top of this, the company has demonstrated that it could be a winner in the AI revolution. Google Cloud is a major provider of AI tools and services, and this has helped the unit's revenue climb in the double digits in recent quarters. And with an AI market forecast to reach into the trillions in a few years, Alphabet is well positioned to see more growth.

All of this means that even after Alphabet stock's recent climb, it still remains a fantastic tech player to buy and hold -- and now you can do so without worrying about any potential upset from the antitrust case.

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Adria Cimino has positions in Amazon and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.