To Google Inc (GOOGL) or To Alibaba Group Holding Ltd (BABA): Choosing Among the Fallen Stars

Both Google Inc (NASDAQ:GOOGL) and Alibaba Group Holding Ltd (NYSE:BABA) present investing opportunities in the market given the levels that the stocks are currently trading on. In a segment on CNBC, this investment dilemma was discussed.

Google Inc (NASDAQ:GOOGL) which was trading at $516.35 at the closing bell of the last trading day is almost 17 percent lower than its 52-week high of $604.83, which it achieved on April 2 this year. Alibaba Group Holding Ltd (NYSE:BABA) on the other hand was trading nearly 9 percent below its all time high of $120, which it achieved on November 13, on the last trading day.

Neil Soshi, of CRT Capital Group discussed three factors that are pulling Google Inc (NASDAQ:GOOGL)’s stock down.

“[…] One is concern that add dollars are flowing out of Google and going into Amazon and other apps and websites. Secondly, concerns about the European Comission potentially filing an antitrust suit against Google Inc (NASDAQ:GOOGL) and see what happened to Microsoft when that happened and lastly Google doesn’t have strength in social and real time communications, and so the concern is that Google is going to get hit […],” explained Soshi.

Factors affecting Alibaba Group Holding Ltd (NYSE:BABA) are much different than those enveloping Google. According to Pete Najarian, many investors are looking at a rally for the Chinese e-commerce giant as hinted by the action on the options market.

Google Inc (NASDAQ:GOOGL)’s upside potential is that the market is overreacting to the issues that plague the company. Soshi mentioned that according to his research, which involved talking to many companies who are advertising on the internet, Google’s market is not shrinking, and the tech giant’s customers are not bailing out on it. He believes that the online advertisement market is big enough for both Google and Facebook to coexist.

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