Alphabet (NASDAQ:GOOG) has been on a certified tear, and its share price has jumped by almost 125% over the past twelve months. The massive capex spending fears seem to have receded, and the market appears to be increasingly focused on the company’s bright future.
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While that’s all fine and dandy, Alphabet is playing in a very lucrative sandbox with some hard-charging competitors. Amazon remains the largest cloud computing company around. Meanwhile, the upstart Anthropic is on the rise, particularly in the all-important enterprise market.
By pretty much every metric, GOOG is trading at a healthy premium above its historic average. Is the company’s share price on the cusp of a period of consolidation?
Not according to investor Jack Elias, who sees a clear path to additional gains on the horizon.
“Despite the meteoric rise in the share price over the past year, I remain incredibly optimistic about the future prospects of this business,” states the investor.
Elias notes the various advances the company is delivering with its AI ventures, which run the gamut from hardware through software. He cites the firm’s recent announcement that it will begin selling its TPUs to some of its customers for use in their own data centers (“an exciting new development”).
The investor is also enthusiastic about the company’s “slew of new models and agents,” including the recent launch of an update for its Deep Research agent, which integrates the Gemini 3.1 Pro model. Elias points out that 3.1 Pro allows the agent to securely connect with internal databases.
“This should be a great selling point for Google when pitching to enterprise customers, as these clients not only require the models to perform at a high level but also to ensure that no proprietary data is accidentally leaked,” he adds.
Moreover, the company is busy integrating its LLMs into its large family of products, with Elias citing the example of Google Maps and its improved ability to service customers with increasingly “clear and customized instructions.”
When it comes to the GOOG’s value, the investor is clear. Using a discounted cash flow model, Elias calculates that GOOG’s shares are undervalued by some 50%. This leads him to issue another bullish call on the company.
“I am as confident as ever that the company will continue to outperform the broader market,” concludes Elias, who maintains a Strong Buy rating for GOOG. (To watch Elias’ track record, click here)
Wall Street is also quite confident. With 10 Buys and nary a Hold nor Sell, GOOG enjoys a Strong Buy consensus rating. Its 12-month average track record of $436.88 points to an upside of 15%. (See GOOG stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.