Alphabet (GOOG 0.74%) (GOOGL 0.70%) has been a dominant force in the advertising market for years, thanks to its incredibly popular Google search engine. But with the emergence of artificial intelligence (AI) and chatbots, the company faces an uncertain future, and a recent antitrust ruling further complicates the situation for investors.

The good news, however, is that the company continues to perform exceptionally well and the stock is having a great year, up about 29% heading into Tuesday’s trading. And it’s still one of the most modestly valued tech stocks today.

Is Alphabet a good stock or are there too many risks surrounding the company for it to be a safe long-term investment?

Alphabet exceeded expectations in the third quarter

Despite all the business concerns of late, Alphabet’s operations looked more than good when it last reported results in October. In the most recent quarter, which ended September 30, the company posted exceptional numbers, with revenue for the period increasing 15% to $88.3 billion and beating market expectations. analysts of $86.3 billion. And its earnings per share of $2.12 easily beat Wall Street’s forecast of $1.85.

The company’s operations appear strong, with Alphabet using AI to improve its customer offerings. Based on its recent results, it certainly doesn’t appear that the company is facing any serious headwinds or adversity.

But a company’s quarterly earnings report only gives a small snapshot of its situation. And despite Alphabet’s good performance, investors should remain cautious about technology stock because it faces considerable risks.

Why Alphabet could face a tougher year in 2025

The big unknown about Alphabet these days is its antitrust case. A judge ruled in August that its research business was a monopoly, and it remains unclear what effect that finding will have on the company.

A possible solution could involve dissolving the company. While this is a drastic measure, it is a potential scenario that investors should not ignore.

Regulators can also impose restrictions that could affect Google’s deals and its search dominance. Depending on the regulators’ decision, there could be significant consequences for Alphabet’s business and the stock.

But even if regulators don’t break up the company or impose restrictive measures on its research business or related deals, Alphabet could still face other challenges next year. As other tech giants develop their AI and offer more competitive search solutions, Google’s share of the U.S. search ad market could shrink and fall below 50% next year, according to analysts. eMarketer estimates.

This would be a monumental development, as it would be the first time in over a decade that Google has less than half of the US search ads market. Not only would this potentially cause a considerable drop in the company’s advertising revenue, but it could also affect investors’ and analysts’ growth expectations for the company in the long term.

Is the stock worth buying today?

Alphabet appears to be a cheap stock since it trades at just 24 times trailing earnings, which is nowhere near the average stock in the market. Selected Technology Sector SPDR Fundswhich trades at more than 41 times earnings.

But given the risks of owning these stocks, investors should demand a discount to account for the uncertainty ahead. Google’s search business is such a key part of Alphabet’s operations that if it continues to lose market share next year, it could lead to a massive selloff.

Even though the company is still doing well right now, investors should always look at the long-term picture. With potentially more competition in search ads, Google could lose the advantage it has enjoyed for many years that has made it such a compelling search engine. growth stocks.

Given its modest valuation, it might be worth buying the stock at its current price, but it’s not a suitable option for risk-averse investors. The safest decision would be to take a wait-and-see approach. It is still far too early to say what impact increased competition will have on Alphabet’s results and what the consequences of the antitrust case will be.