From January, up until this week, it may have seemed as if Google parent Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) were emerging out of its recent slump. During this timeframe, GOOG stock rallied by more than 20%.

Last month’s layoff news may have been a big reason for this, but renewed hopes that the tech giant is not falling behind in areas such as artificial intelligence (or A.I.) chatbots likely played some role as well. Unfortunately, these hopes have been dashed.

After weeks of anticipation, Alphabet has finally unveiled its own chatbot platform. Unimpressed with the company’s plan to counter potential competition to its cash-cow Search unit, shares have pulled back in response.

While some may view this as an overreaction, the market is likely right on the money. If that’s not bad enough, this latest sell-off may not necessarily be a “one-and-done” event.

GOOG Stock: A.I. Event Fails to Save the Day

When OpenAI’s ChatGPT was released in November, some investors worried it could eventually “disrupt” Alphabet’s dominance in the area of search advertising.

These concerns have kept climbing following news of Microsoft’s (NASDAQ:MSFT) $10 billion investment in OpenAI, and its plans to integrate OpenAI’s technology into its platforms. Understanding the need to respond quickly to this emerging threat, Alphabet has revealed its answer to ChatGPT: Bard.

On Feb. 8, at a live-streamed “A.I. Event,” Bard made its public debut. The company may have expected this event to help put to rest worries about Search market competition, but far from “saving the day,” this event was an abject disaster. As Reuters reported, in an ad released in conjunction with the event, Bard gave an inaccurate answer to a prompt.

Even worse, Alphabet revealed little on how it planned to integrate Bard into its Search platform. This was concerning in the eyes of GOOG stock investors. Microsoft revealed it has already started to integrate OpenAI’s technology into its Bing search engine and Edge web browser at its own event this week.

Competition Is Just One of Many Issues

Clearly not ready for prime time, it makes sense why Bard has increased, not decreased, the market’s confidence in Alphabet’s ability to keep Microsoft from becoming a formidable competitor in search advertising.

Increased competition in this space could negatively affect both future growth and operating margins for the company’s core business segment.

As you may know, Alphabet is experiencing competitive pressures across its other units, such as Google Cloud and YouTube, as well. It would be one thing if competition was the only issue at hand with GOOG stock.

However, alongside this problem, are a slew of other problems that stand to threaten both the company’s future operating results and the future performance of its shares.

Alongside the increased competition, the current slowdown in demand in the tech and digital advertising markets is having an impact on near-term results. Although sell-side analysts expect GOOG’s earnings to rise this year, after dropping in 2022, it’s not a guarantee that this will happen.

As I have discussed recently, Alphabet is also contending with two antitrust suits from the U.S. Department of Justice. With all these issues on its plate, there’s still plenty out there to sink GOOG yet again.

The Takeaway

Although Bard’s debut was undoubtedly a bust, I admit that it’s possible that subsequent developments with Alphabet’s A.I. game plan may help to assuage the latest concerns about competition.

The company’s earnings could also start to improve in the quarters ahead, whether from better macro conditions or from the cost savings resulting from the recent layoffs. It’s also possible that Alphabet can emerge from current regulatory issues relatively unscathed.

However, there’s no reason to buy today, in the hopes such promising signs emerge. There’s a strong chance the situation worsens before it improves, which will in turn result in further weakness for shares.

Put simply, it’s best to stay away from GOOG stock. Instead of rushing in, wait until there’s concrete evidence that competitive risks are starting to ease, and the company’s myriad of other problems are beginning to resolve.

GOOG stock earns a D rating in Portfolio Grader.

On the date of publication, Louis Navellier held GOOG and MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.