Alphabet’s Valuation Concerns Emerge Amid AI Hype
Alphabet Inc. shares have surged 87% since April lows, reaching overbought territory with a 14-week RSI above 75. The tech giant now trades at a 44% premium to its 50-week moving average, raising questions about near-term upside potential.
While Google maintains operational dominance in search and AI infrastructure, technical indicators suggest the rally may be overheating. The stock's current $280 price point offers limited margin of safety compared to its $195 mean-reversion level.
Market enthusiasm for AI capabilities appears priced in, with valuation multiples stretching beyond historical norms. This comes despite Google's unrivaled data distribution network and cloud computing advantages.