Buy the dip in stocks like Alphabet and Block, chief investment strategist says

It’s time to buy the weakness in stocks like Alphabet and Block, according to Eva Ados, ERShares COO and chief investment strategist.

Ados appeared on CNBC’s “Power Lunch” on Tuesday to give her take on some of the market’s biggest movers of the day. Here is what she had to say during “Three-Stock Lunch.”

Alphabet

Google parent Alphabet is not only trading at a huge discount to its peers, but it’s also making strides in the security space with its deal to acquire cloud security startup Wiz, according to Ados.

“It’s a buy. I like Google. I think it’s here to stay. Google is not going anywhere, they have a huge moat. I like the fact that they’re down 20% in the last month,” Ados said.

“We like also the Wiz acquisition,” she continued. “That’s a strategic move for Google. It’s a vertical integration — they’ve been their customer for years, and that’s a company in the cloud security space so they’re addressing a major national security issue here. It’s not a nice to have, it’s a must have for Google.”

Google agreed Tuesday to acquire Wiz, it in largest deal to date. Wiz will become a part of the company’s cloud business when the transaction closes, likely in 2026.

Shares fell more than 2% Tuesday, bringing its year-to-date decline to 15%. But that’s not a threat for Ados, who said that Google is “now priced at half the price of their peers, so what’s not to like here?”

Ralph Lauren

Ados is sticking by Ralph Lauren after the stock’s recent pullback. The investor kept her hold rating on the luxury retailer, which has lost nearly 19% this month and is down roughly 5% this year.

She noted that the company’s revenue growth is still attractive compared with the rest of its category, and that its gross margin and EBITDA margin has improved in recent years.

“This is an established company for years. It’s competing in a very competitive environment with e-commerce companies like Amazon,” Ados said. “The only reason why I have them as a hold is first of all, from the relative valuation point of view, they are appropriately priced, and secondly there is some concern now when it comes to the economy and consumer spending.”

Goldman Sachs upgraded Ralph Lauren to buy from neutral earlier Tuesday, saying that shares are trading at an attractive entry point after a recent sell-off. Ralph Lauren has more limited exposure to key near-term risks such as tariffs and the health of the lower-income consumer, the firm added.

Block

Ados also recommends buying the dip in Block, a stock that’s been beaten down this year as revenue growth has slowed. Block’s stock price has plummeted roughly 30% this year.

“It’s a buy … the company is down 80% since their Covid highs. It’s attractively priced, we believe,” Ados said. “In addition to that, in the last year, their EBITDA margin more than quadrupled so we like them from a fundamental point of view and also we think there’s going to be good news that’s going to benefit this category in the short-term future.”

Ados expects Block, which acquired buy-now-pay-later firm AfterPay in 2022, could get a bump from competitor fintech company Klarna going public.

“Once this happens, that’s going to be a major catalyst for the fintech space and most importantly, for the buy-now-pay-later category,” she said.

KBW earlier upgraded Block to outperform from market perform, citing an attractive risk-reward for shares following the stock’s recent sell-off.