Alphabet valuation ‘could be in a holding pattern,’ says Mizuho

Mizuho finds it “challenging to disprove the negative narrative” around Alphabet (GOOGL), especially with technology disruptions in search and a potential market share shift. The company appears indecisive on cost cutting, “leaving incremental shareholder value on the table,” the analyst tells investors in a research note. The firm says that although Google Cloud Platform is positioned to benefit from artificial intelligence’s demand for accelerated computing, the trade-off may not be positive if accompanied by share loss in search. However, Mizuho keeps a Buy rating on Alphabet with a $170 price target. The stock is undervalued, trading below historical valuation averages, but Alphabet’s multiples “could be in a holding pattern near-term until these issues are resolved.”