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Is Alphabet Stock Attractive for Bargain Hunters Right Now?

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Alphabet (NASDAQ:GOOGL) stock rose by 3.25% to $1,146.31 on Monday. Notably, the stock has underperformed the broader market over the past month. While the S&P 500 has fallen 11% in the past month, Alphabet stock has fallen 14% during the same period.

However, there are still some reasons why investors might want to purchase Alphabet shares right now.

Alphabet stock trades at a 34% discount

During the COVID-19 crisis, bargain hunters might want to consider Alphabet stock in the big tech space. At the closing on Monday, Alphabet shares were trading at a 34% discount to their 52-week high. Also, the shares are trading at a 36% discount to Wall Street analysts’ average target price.

Alphabet fell when the coronavirus sparked a panic sell-off in company shares around the world. Apple, Facebook, Amazon, and Netflix stocks also suffered amid the sell-off. However, Amazon and Netflix shares have mainly regained the ground that they lost.

While the COVID-19 pandemic has impacted Alphabet stock, it looks like a temporary setback. The stock should rebound after the coronavirus outbreak subsides.

COVID-19 crisis boosts demand for cloud services

As Microsoft (NASDAQ:MSFT) has shown, the demand for cloud services is spiking during the COVID-19 pandemic. To curb the spread of the deadly coronavirus, businesses have closed stores. Companies closed offices and moved operations online. Retailers and restaurants need more cloud capacity to meet the increase in online orders. Apple, which has shut most of its retail stores and now sells products online, uses Google cloud services.

As more people shop online, payment companies like PayPal are also seeing an increase in the demand for their services. Social media companies like Twitter and Facebook have also reported a surge in the demand for their services. PayPal and Twitter run their workloads on Google’s cloud platform.

Therefore, the coronavirus crisis has created an opportunity for Google to make more cloud sales, which should bode well for Alphabet stock.

Cash is king

Recently, Walt Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA), and ViacomCBS sold bonds to raise more cash. Selling bonds demonstrates that cash is king during the COVID-19 crisis.

If surviving the coronavirus requires a strong war chest, Alphabet looks safe. The company finished 2019 with about $120 billion in cash reserve. The company used some of the cash to help small businesses during the coronavirus outbreak. Investors want stocks that can survive the COVID-19 crisis. Notably, Alphabet stock looks like a strong candidate.

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