Alphabet (NASDAQ:GOOGL) may face regulatory opposition in its potential acquisition of HubSpot (NYSE:HUBS), reigniting its antitrust struggle. Last week, Reuters reported that Alphabet is considering acquiring HubSpot, a customer relationship management platform provider with a market cap of about $34 billion.
Since the transaction hasn’t been officially disclosed, it’s uncertain if GOOGL will proceed with the acquisition. However, several analysts already see significant hurdles concerning the deal.
Analysts’ Take on the Potential Deal
Analysts from various firms, including RBC Capital, Oppenheimer, and Evercore ISI, expressed similar concerns and expect regulatory hurdles for the deal. RBC Capital analyst Brad Erickson acknowledges the strategic rationale behind the deal and believes that the combination will make Alphabet more competitive against rivals Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). However, citing the regulatory challenges encountered by previous tech mergers, the analyst believes antitrust concerns would likely prevent the deal from happening.
Meanwhile, Oppenheimer analyst Ken Wong considers the acquisition “highly unlikely.” Further, Evercore ISI analyst Mark Mahaney said that the company would face numerous obstacles in the acquisition process. Mahaney recommends that Alphabet establish a standalone software business to bypass the regulatory issues.
It’s worth noting that Alphabet is entangled in numerous antitrust lawsuits. Moreover, its legal and regulatory risks constitute 20.7% of its total risks, which is higher than the sector average of 18.1%.
Is Alphabet Stock a Buy, Sell, or Hold?
Alphabet stock is up about 11% year-to-date. However, it underperformed its peers, including MSFT, AMZN, and Meta (NASDAQ:META). Nonetheless, Wall Street analysts are bullish about GOOGL’s prospects.
Alphabet stock has 30 Buys and seven Holds for a Strong Buy consensus rating. Analysts’ average GOOGL stock price target of $165.98 implies 7.19% upside potential.
