Shares in Google parent Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) have rallied since the start of the year, but the GOOG stock rebound is losing momentum and could soon reverse course.

Along with the prospect of overall market sentiment souring again, the tech giant’s Feb. 2 quarterly earnings release could also drive a sell-off.

While the market is expecting weak results, right now it’s unclear what sorts of guidance updates Alphabet’s management will provide. If the company’s updates to guidance prove disappointing, it may be enough to send shares moving sharply in the other direction.

That said, a post-earnings pullback may not be the worst outcome in the world. It might put shares on a path to a “can’t miss” entry point for a long-term position. However, ahead of earnings, and at present price levels, there’s no need to rush into a position.

GOOG Stock is Very Vulnerable Today

The rising tide of the stock market has been a big reason Alphabet shares have moved higher this month. Over the past few weeks, increased hopes of the Federal Reserve easing, or possibly even pivoting on interest rates have resulted in a broad market rally.

However, with the Fed likely to continue raising rates (albeit slowly), and the risk that cooling inflation remains “sticky” at relatively elevated levels, the market’s recent rally could morph into a sell-off, knocking GOOG stock lower.

But besides market volatility, Alphabet’s upcoming release of its fourth-quarter results could also push shares lower. In recent months, sell-side analysts have trimmed their earnings estimates for GOOG.

Between signs that results for the company’s YouTube segment have weakened further in the past quarter, along with the fact the overall tech slowdown has intensified, there’s a strong chance results fall short of forecasts.

There’s also a strong chance that management’s guidance updates are not what the investing public wants to hear. Even if the company guides for resiliency during this rough patch for the sector, it could disclose that other factors, such as regulatory scrutiny/compliance costs, may weigh on results in the quarters ahead.

An Opportunity for Patient Investors?

A market downturn, regulatory headwinds, and a negative response to the latest results/guidance aren’t the only things that could sink GOOG stock in the near-term. As Louis Navellier has noted in recent coverage of the stock, concerns about the long-term impact of rising competition continue to climb.

Not just for the company’s YouTube unit, or for its cloud computing segment. With its $10 billion investment in OpenAI and its plans to implement OpenAI’s technology (including ChatGPT) into its own platforms, Microsoft (NASDAQ:MSFT) could be on its way to building a serious competitor to Google’s cash-cow Search segment.

With these negatives in mind, frustration and disappointment may lie ahead for investors holding GOOG stock today. There is a silver lining for investors who currently do not have a position in the stock. If you’re patient, a great buying opportunity could arise.

These negatives could push GOOG back down to its 52-week low ($83.45 per share). Perhaps, to even slightly lower prices. If this happens, risk/return will become highly favorable. Why? If the price is right, a mere slight improvement in operating performance could cause outsized returns.

Bottom Line

Despite dropping massively from its all-time high, a full rebound for Alphabet may prove challenging. With its growth likely to continue slowing down in the years ahead, the stock’s price-to-earnings (or P/E) ratio of 19.25 is likely a fair multiple.

Sure, as the current downturn eases, and as expected cost savings from Alphabet’s recent layoffs take shape, earnings could hit $6.05 in a year’s time. However, applying GOOG’s current multiple against this earnings forecast, and you get an estimated price of around $116 per share.

For investors buying today, that is a middling return relative to the aforementioned downside risk. If you get in at re-tested lows, or even lower, though, this would definitely be a satisfactory return.

With this, here’s my verdict on GOOG stock today: monitor it, but hold off buying.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.