Alphabet Near $300: Your Last Chance to Buy?
Key Points
Alphabet's share price has dipped since hitting a record high last month.
It owns several successful businesses and generated $73.6 billion in free cash flow over the trailing 12 months.
You don't need to get the timing perfect when investing in high-quality companies.
- 10 stocks we like better than Alphabet ›
Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) has done extremely well for its shareholders this year, and the stock hit a new all-time high of $329 in November. However, after a recent pullback, shares briefly moved below $300 and are still close to that level as of Dec. 19.
Many investors may be wondering if they should buy shares now or wait to see if Alphabet falls further, considering the recent dip in the tech sector. Personally, I wouldn't wait. Here's why.
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Image source: Getty Images.
The benefit of investing in great companies
It's hard to find many tech companies as dominant as Alphabet. The holding company is most famous for owning Google, the world's largest search engine, but it also owns the most popular web browser (Chrome), video streaming site (YouTube), and mobile operating system (Android). Among the other businesses that Alphabet owns are Waymo, a self-driving car company, and Wing, a drone delivery service.
Alphabet generated $73.6 billion in free cash flow (FCF) over its past four reported quarters. And even with all of its successes, it remains a more affordable investment than many of the other megacap tech stocks. Trading at 29 times trailing earnings as of Dec. 17, it's the second-cheapest company among the "Magnificent Seven" (which also include Apple, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla).
Alphabet has historically outperformed the stock market. Based on the strength of its businesses, it looks likely to keep doing so.
This isn't your last chance to buy Alphabet, and truthfully, its share price could go up or down in the short term. The current price might not be the very lowest it will go in the near future. But when you're investing in great companies, you don't need to worry about timing the market. What's important is filling your portfolio with long-term winners -- not whether you bought their shares at $295, $305, or somewhere in that area.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
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Lyle Daly has positions in Alphabet, Meta Platforms, Nvidia, 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.
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