Cloud Hosting

Source: PK Studio / Shutterstock

Dont look now, but Alphabets (NASDAQ:GOOG,NASDAQ:GOOGL) shares are nearing 52-week highs. Thats good news for owners of GOOG stock and technology stocks in general. Tech stocks could be back in the saddle.

GOOGs shares are trading within 3% of their 52-week high of $142.38. In the past year, its shares are up nearly 40% and 154% over the past 60 months. Thats almost 3x better than the S&P 500 and 42 percentage points higher than the Nasdaq 100.

Whats especially nice to see if youve opted for GOOG over Apple (NASDAQ:AAPL) stock is that Alphabet is running away from the maker of iPhones as we travel through the years final quarter.

While I like Apple and think it should be in every investors long-term portfolio, Alphabet should be alongside it.

Im no technical analyst, but the fact that Alphabets relative strength index (RSI) has dramatically improved in October it was 44 at the end of September, and now its 66, about 50% higher tells me almost ready to crash through its 2021 highs around $150.

A companys RSI ranges between 0 and 100. However, most investors consider anything over 70 to be overvalued and anything under 30 to be overvalued. As a result, some would say GOOG stock is getting close to overvalued territory.

However, if you follow Investors Business Dailys thoughts on relative strength it takes a stocks performance over the past 52 weeks and compares it to all other stocks to develop a rating for that stock you might not feel as bad because in mid-July its IBD RS rating went over 80.

History reveals that the stocks that go on to make the biggest gains tend to have an RS Rating north of 80 in the early stages of their moves, IBD wrote on July 14.

Since mid-July and IBDs article, GOOG stock is up more than 10%. More could be just around the corner.

Of the 54 analysts that cover Alphabets stock, 45 rated Overweight or an outright Buy, with a $150.92 target price 10% higher than where its currently trading.

When Alphabet reported strong Q2 2023 results at the end of July $21.8 billion in operating income, 12% higher than last year Needham analysts had three reasons to be optimistic about the companys stock:

If the Needham analysts were worried about OpenAIs effect on Alphabet, they had a funny way of showing it, raising their price target by $25 to $140.

YouTubes ad revenue in Q2 was $7.7 billion, 4% higher than Q2 2022 and 15% higher than Q1 2023. Thats important because it reverses three consecutive quarters of slowing growth, demonstrating that YouTubes ad revenue model isnt broken.

New YouTube CEO Neal Mohan, who took on the role in March, said in July that he plans to continue to improve the platforms monetization tools and grow the YouTube creator communities. Alphabet CEO Sundar Pichai also noted that YouTube Shorts are viewed by two billion logged-in users each month, 33% higher than a year ago.

Considering the company only started ads on YouTube Shorts late in 2022, the future revenue stream from this segment of YouTube looks very promising.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where hes appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

Go here to read the rest:
GOOG Stock: Is Alphabet the First Quadrillion-Dollar Company? - InvestorPlace