Santa Rally' For Tech Stocks: Can Google Keep Its Momentum?

As the holiday season approaches, investors are eagerly anticipating the 'Santa Rally,' a historical phenomenon that typically boosts tech stocks during the final months of the year. This year, with presidential elections looming, the stage is set for another potential rally. But is Google stock a buy or sell heading into 2025? Let's dive into the data and analysis to find out.



Historically, tech stocks have shown strong performance during presidential election years. In 2024, the S&P 500 Information Technology sector is up over 28% year-to-date, outperforming other sectors (Source: YCharts). This trend is expected to continue into the 'Santa Rally' season, with December being the strongest month for stocks in election years (83% of the time since 1950, according to Ryan Detrick of Carson Research).



Google stock, in particular, has gained nearly 22% in 2024, outperforming the S&P 500. The company's AI-infused internet search has shown signs of boosting its core advertising business, with AI Overviews gaining traction. However, concerns about the emergence of generative artificial intelligence and legal woes have created an overhang for Alphabet stock.

On the one hand, the 'Santa Rally' phenomenon and strong historical trends in election years suggest that Google stock could continue its momentum. On the other hand, the uncertainty surrounding generative AI and legal challenges could dampen investor sentiment.



To make an informed decision, investors should consider Google's upcoming fourth-quarter earnings and guidance. Strong earnings and positive guidance could provide a catalyst for the stock to continue its upward trend during the 'Santa Rally.' Conversely, disappointing results or guidance could lead to a sell-off.

In conclusion, the 'Santa Rally' for tech stocks in 2024 presents an opportunity for investors to profit from the historical trends and strong performance of tech stocks during presidential election years. However, individual company performance, such as Google's earnings and guidance, will play a crucial role in determining the fate of tech stocks during the 'Santa Rally.' As always, investors should conduct thorough research and consider their risk tolerance before making investment decisions.