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Chart Analyst Says This 1 Big-Name Tech Stock Could Hit A Fresh High By Mid-April

Chart Analyst Says This 1 Big-Name Tech Stock Could Hit A Fresh High By Mid-April

This stock is already up by double-digits this year, and its chart points to a new record high in the coming weeks.

Google-parent Alphabet’s (NASDAQ: GOOGL, GOOG) shares have had a good start to 2021.

The stock is up more than 21% year-to-date, and has risen nearly 5% over the last month. And two chart watchers say the stock still has room to run.

Google has been under scrutiny lately, with CEO Sundar Pichai testifying before Congress last week in a hearing on misinformation.

Pichai testified that Alphabet aims “to have transparent policies and enforce them without regard to politics or point of view,” adding that the company’s “ability to provide a range of information and viewpoints while also being able to remove misinformation is possible only because of legal frameworks like Section 230,” which protects online platforms from liability for what their users post.

Despite the Congressional magnifying glass, the stock received two upgrades over the last week.

Last Thursday, Morgan Stanley (NYSE: MS) boosted its price target on the stock to $2,350, which would mark a new record high and implies 10% upside from the current price. Then Tuesday, Stifel analyst Scott Devitt issued a Buy rating for Alphabet shares and also raised his price target to $2,350 from $2,025, describing the stock’s valuation as “reasonable” compared to some of the other tech stocks he covers.

Devitt added that Alphabet is set to rake in more advertising dollars as several sectors—travel and automotive, among others—recover from ground lost to shutdowns due to the coronavirus pandemic. But at the same time, COVID push far more activity online, and the Stifel analyst doesn’t see a reversal of that trend even as the world reopens.

From a technical perspective, Alphabet has been stuck in consolidation since early February and Newton Advisors founder and President Mark Newton says the chart points to upside on the horizon.

“I like Alphabet as being the preeminent stock in the FANG group and one to still favor for the weeks and the months to come,” Newton said. 

Source: TradingView.

“It’s tough to find much fault with the stock. It’s been in a very linear uptrend and still shows hardly any deterioration despite all these outflows out of technology in the past couple of months, so, it’s held up remarkably well,” Newton added.

While there could be some near-term regulatory headwinds, the stock breached its record high set in February this week, which is a bullish signal.

Newton argues the move above the February high “should cause it to accelerate and get up toward $2,300 into the middle of April.”

“Technology is going to come under increasing pressure from both the left and the right in the months to come,” Newton continued. “If Google gets under right near $1,770, it’s a buy. I would use any kind of weakness to still own the name and think it moves higher.”

Laffer Tengler Investments’ Nancy Tengler is also bullish on the stock, noting that Alphabet’s earnings, sales, and free cash flow are all expected to grow somewhere between 19% and 24% as search activity returns to pre-pandemic levels.

“That gives the company a lot of levers to pull in terms of stock buybacks and… maybe one day, let’s hope, the dividend,” Tengler, the firm’s chief investment officer, added. “On our valuation work, which is relevant price-to-sales ratio, the stock is attractive. The fundamentals are improving. The cloud business is growing.”

Tengler continued: “We own it and we like it a lot. Some of this is reflected in the price—it’s up 82% on a trailing one-year basis—so, we’re hedging our FANG pick with Google and with Amazon (NASDAQ: AMZN), which has done nothing for the last six months.”

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