Earlier this year, it looked like Google and YouTube parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) was losing the generative artificial intelligence ( ) arms race to Microsoft (NASDAQ:MSFT). However, Google just scored a win against Microsoft’s Bing search engine. That’s positive news for GOOG stock, and so is a U.S. high court decision that suggests Google will continue to be protected against certain legal liabilities.
Alphabet’s shareholders have enjoyed strong returns lately. Momentum-focused traders should certainly be happy about this. On the other hand, value-focused investors might be concerned about Alphabet’s valuation.
However, just because a stock went up doesn’t necessarily mean it’s overvalued. Alphabet is a textbook example of a publicly listed company that’s in favor on Wall Street but can continue to provide value to the shareholders throughout the year.
Is GOOG Stock Too Expensive to Buy Now?
Since GOOG stock touched its 52-week high not long ago, some folks might be afraid to invest in Alphabet now. Consider, however, that Alphabet’s GAAP forward price-to-earnings (P/E) ratio of 23.09x isn’t outlandishly higher than the sector median of 19.46x.
In other words, Alphabet’s 23-ish P/E ratio shouldn’t remind anyone of the dot-com bubble. More important than any traditional valuation metric, however, is whether Alphabet can continue to thrive as a business enterprise.
Recent headlines suggest that the answer is yes. For example, the Supreme Court just dismissed a lawsuit that would have held Google and YouTube (and therefore Alphabet) liable for content that may have contributed to a violent act.
In effect, the Supreme Court upheld Section 230, which protects content platforms from liability arising from user-produced content. This high-court decision is a huge win for Alphabet, which derives significant revenue from Google and YouTube.
Electronics Manufacturer Chooses Google Over Bing
Some onlookers may have already decided that AI-enhanced Bing is the big winner and Google is the loser in 2023. Don’t jump to any hasty conclusions, though. Google and Alphabet actually just scored a huge win against Microsoft and Bing.
Specifically, electronics manufacturer Samsung chose not to replace Google with Bing as the default search engine for Samsung’s smartphones. Reportedly, Google comes pre-installed as an app on Samsung’s smartphones. Evidently, that won’t change anytime soon.
So, if you’re thinking that everybody is switching from Google to Bing in 2023, think again. Remember, both Google and Bing have generative AI features now. And if Samsung decided to stick with Google, maybe other manufacturers will also choose Google over Bing.
It’s Definitely Not Too Late to Buy GOOG Stock
Clearly, the headlines indicate that Alphabet is on a winning streak. This doesn’t guarantee that Alphabet will succeed in the future. Still, every piece of good news is a reminder that Alphabet can continue to offer value to its shareholders.
So, don’t worry too much about Alphabet’s valuation according to traditional metrics. Beyond the numbers, Alphabet is an outstanding technology company that tends to reward its shareholders over the long run. Therefore, it’s not too late to buy GOOG stock, and you might want to pick up a few shares today.
On the date of publication, David Moadel 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.