Bond Market Skepticism Grows Over AI Sustainability
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 10h ago
0mins
Should l Buy GOOG?
Source: Fool
- Bond Market Pressure: Oracle's credit default swap (CDS) pricing surged in November, currently at nearly four times the levels seen in September, indicating bond market concerns over its debt, particularly regarding its $300 billion deal with OpenAI.
- Capital Expenditure Risks: Oracle faces challenges related to the ballooning costs of building data center infrastructure to support AI growth, with market skepticism surrounding OpenAI's internal projections of burning through over $100 billion in cash before 2030.
- Divergent Stock Market Performance: While the bond market remains cautious about Oracle and Microsoft, the equity market continues to invest in AI companies, with Alphabet showing stronger performance due to minimal exposure to OpenAI and a better financial position.
- Bubble Risk Assessment: History suggests that companies often overreach during technological revolutions, leading to capital flowing to unproductive sources; although predicting when a bubble will occur is difficult, discerning investment in AI-exposed companies may promote sustainable growth.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOG is 336.08 USD with a low forecast of 255.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 331.330
Low
255.00
Averages
336.08
High
400.00
Current: 331.330
Low
255.00
Averages
336.08
High
400.00
About GOOG
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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