In the face of regulatory uncertainties and heavy investments in artificial intelligence (AI), Google parent company Alphabet Inc's shares, traded under GOOGL and GOOG tickers, have experienced a sharp decline of 35% from their all-time highs. This significant drop has firmly placed Alphabet in bear market territory, leading investors to question whether a rebound is on the horizon or if caution should prevail.

Technically speaking, Alphabet's stock finds itself entrenched in bearish waters as it currently trades below its key moving averages. The 5-day, 20-day, and 50-day exponential moving averages (EMAs) all indicate a strongly bearish trend. Despite a glimmer of buying pressure that suggests a potential future turnaround, Alphabet's stock languishes below its 20-day simple moving average (SMA) of $159.68 and its 50-day SMA of $168.01, painting a broader bearish picture.

Further adding to the bearish sentiment is the fact that Alphabet's stock has been trading below its 200-day SMA of $157.08 for a significant period. Additionally, the gloomy MACD indicator stands at a negative 4.01, providing another indicator of bearish sentiment. On the other hand, the Relative Strength Index (RSI) of 45.74 suggests that Alphabet's stock is neither overbought nor oversold. The Bollinger Bands, which currently range between $149.03 and $171.41, signal potential for further selling pressure, with the stock currently situated in the lower bearish band.

The prevailing bearish sentiment among Google stock investors can be attributed to various factors. Firstly, the company has been hit with an antitrust lawsuit by the U.S. Department of Justice, with Europe also pursuing its own antitrust cases. The looming threat of potential hefty penalties leaves investors anxious about the impact on Alphabet's stock. Additionally, Alphabet, along with other tech giants, has embarked on a significant spending spree in the field of AI development. While this promises future advancements, the strain it places on short-term capital efficiency has investors concerned.

Despite the current bearish outlook, there are reasons to be hopeful for an Alphabet comeback. The company boasts a solid balance sheet, with annual revenue growth of 18.16% and a 21% climb in EPS over the past five years, fueled by aggressive share buybacks. Minimal debt, healthy cash reserves, and the recent introduction of a dividend sweeten the deal for long-term investors. Once Alphabet successfully navigates the regulatory hurdles and trims its AI-related capital expenditure, it may reclaim its former capital-efficient glory, making the stock attractive for a rebound over the long term.

However, in the short term, the outlook for Alphabet's stock continues to appear grim, with the bearish trend showing no immediate signs of reversing. Investors will need to closely monitor key developments and market conditions to make informed decisions regarding their positions.