With the declines recently recorded in the technology companies that make up the US100 index, analyst coverage and in particular the recommendations themselves on "Big Techs" have undergone a rather pronounced downward revisio
This is particularly true of Alphabet (GOOGL.US), which, at its peak, has increased the value of its shares by more than 45% since the beginning of the year. After recent declines, the scale has now reached almost 35%, which, when compared with other companies with slightly smaller capitalisation, is still a very good result.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
Comparison of percentage changes in valuations of the largest technology companies to other companies. Source: Factset, Goldman Sachs
The start of the week brought a downward revision of analyst forecasts for GOOGL shares. UBS downgraded the company's stock to 'neutral' from its previous 'buy' rating. Moreover, a similar decision was made by other financial institutions, including Bernstein, which reduced its rating to 'market perform' from its earlier 'outperform' rating. As the analysts add, the shares above all proceeded too quickly on the wave of euphoria around AI, which at least for the moment all along has not brought about important fundamental changes in the company's business, for this trend to be clearly supported and sustained.
The downgrade lowers Alphabet's consensus rating - a buy, hold and sell rating - to 4,655 points, the lowest for the stock since April 2018. Microsoft (MSFT.US) shares (consensus lowest since mid-2019) and Apple (AAPL.US) shares (lowest since November 2020) are similarly downgraded. Source: Bloomberg
It is noteworthy, however, that up to 85% of analysts still recommend buying GOOGL shares, despite the overall decline in consensus. The current situation may therefore illustrate a deceleration of the recent dynamic rallies, which are still likely to be extended. In this sphere, the key seems to be a further recessionary narrative, which possible bullish sentiment could quickly negate. Source: Bloomberg
Alphabet (GOOGL.US) share chart, D1 interval. The company's shares are experiencing a downward correction after the recent uptrend, which is now testing the support defined by the 50% Fibo elimination of the downward wave initiated in November 2021. Source: xStation 5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
