Investing in Tech Giants

Pivotal Research Group Coverage

Pivotal Research Group has initiated coverage of Alphabet Inc. (NASDAQ: GOOGL) with a Buy rating.

Strong Competitive Position: Pivotal highlights Google’s significant advantages in cloud computing and AI.
Market Dominance: Google commands roughly 90% of the global search market outside of China, and leads in video/audio streaming via YouTube and the Chrome browser.

Monopoly Concerns: In August, Google’s search business was declared a monopoly, leading to investigations by the Department of Justice (DOJ). Remedies may limit Google’s market leverage.
Valuation Perspective: Pivotal believes that current valuations reflect conservative forecasts for search revenue declines post-2027. Regulatory clarity is anticipated to take time, yet a favorable outcome might be influenced by a possible Kamala Harris victory.

Pivotal has also initiated a Buy rating for Meta Platforms (NASDAQ: META), with a target price of $780 by year-end 2025.

Innovative Management: Meta operates well-known platforms like Facebook, WhatsApp, and Instagram, with a reputation for adaptability and innovation in a competitive landscape.
Growth Projections: Analysts foresee strong revenue growth driven by increased usage, new products, advanced targeting, and enhanced pricing strategies fueled by AI efficiencies. They also expect a decrease in losses from Reality Labs.
Risks: Despite optimism, challenges include regulatory scrutiny, competition from Google and Apple (NASDAQ: AAPL), and potential market dominance investigations.

Overall, Pivotal believes that Meta’s strengths, particularly its innovative management and favorable valuation, outweigh associated risks.