Reports indicate that Google and YouTube parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has been on a share-buyback binge. Does this mean that you should buy GOOG stock today? Not necessarily, as a legal case and Microsoft’s (NASDAQ:MSFT) investment in artificial intelligence (AI) technology will likely pose serious threats to Alphabet in 2023.

There’s nothing wrong with monitoring a company’s history of share repurchases. It’s typically a positive sign when a business buys back its own shares. That’s because it demonstrates the company’s confidence in its future ability to deliver positive results.

By itself, however, Alphabet’s self-confidence shouldn’t be a sufficient reason for you to invest in the company. So, first we’ll take a closer look at Alphabet’s recent history of share repurchases, but then we’ll consider reasons to maintain a cautious outlook.

Alphabet Aggressively Buys GOOG Stock

Suffice it to say, there’s no denying Alphabet’s commitment to share buybacks. Impressively, Alphabet has spent more than $100 billion in share repurchases during the past two years. According to data provided by YCharts, Alphabet bought at least $15 billion worth of its own shares per quarter for the past three reported quarters.

This doesn’t necessarily mean that you have to aggressively purchase GOOG stock, though. Check the recent headlines, and you’ll surely find reasons to adopt a watch-and-wait policy.

Particularly alarming is a case that’s being sent to the U.S. Supreme Court, known as Gonzalez v. Google. The plaintiff in the case reportedly alleges that YouTube’s automated recommendations of certain videos promoted, and thereby contributed to, acts of violence.

Alphabet may be legally shielded by Section 230, a communications law that might protect the company from liability for the consequences of its content and/or advertisements. There’s no way to know what the Supreme Court will decide, however. There’s a lot at stake here, since advertising revenue is a significant part of Google’s (and therefore Alphabet’s) business.

Investors Should Consider the AI Threat From Microsoft

For years, Google was the go-to search engine for millions of internet users, and Bing was basically a punchline. 2023 could be a turning point, however, as Microsoft is investing $10 billion in OpenAI and its chatbot, ChatGPT, and has already embedded this AI technology into Bing.

Suddenly, Alphabet has become the butt of the joke instead of Microsoft. Bard is supposed to be Alphabet’s answer to Microsoft’s investment in ChatGPT. But so far, Bard’s reputation hasn’t been stellar. You may recall the time when Bard provided an inaccurate answer to a prompt in an advertisement.

Now, we’re hearing Shark Tank‘s Kevin O’Leary suggest that ChatGPT is “killing Google” (or, at least, killing Google’s tech-market dominance). It will be interesting to find out over the coming months and years whether Alphabet can stage a comeback. Ask yourself: Am I really prepared to bet my hard-earned money on this?

What You Can Do Now

It’s fine that Alphabet is aggressively repurchasing its own shares. Yet, there are other developments to consider. Among them is the Supreme Court case that could be problematic for Google’s ad-supported business.

Then, prospective investors should consider Microsoft’s ongoing threat to Google’s long-standing search-engine monopoly. With those factors in mind, and despite Alphabet’s share buybacks, financial traders should wait on the sidelines instead of hitting the “buy” button now.

On the date of publication, David Moadel did not have (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.