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Alphabet Class C (GOOG)
NASDAQ:GOOG
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Alphabet Class C (GOOG) AI Stock Analysis

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GOOG

Alphabet Class C

(NASDAQ:GOOG)

Rating:89Outperform
Price Target:
$229.00
▲(19.58%Upside)
Alphabet's strong financial performance, driven by high profitability and robust cash flow, is the primary factor in its high score. Technical indicators support a bullish outlook, although caution is advised due to potential overbought conditions. The company's valuation is reasonable, and the earnings call further solidifies positive sentiment with growth in AI and cloud initiatives.
Positive Factors
Cloud Services
Google Cloud shows significant growth opportunities due to low enterprise cloud penetration and potential AI benefits.
Earnings
Alphabet reported strong better than expected 2Q results, including significant growth in search, YouTube, and cloud revenue.
Negative Factors
Advertising
Network ad revenue fell by 1.2% year-over-year, reflecting challenges in the advertising segment.
Legal Risks
There are medium to long term concerns over the effects of AI on search and potential unfavorable court rulings regarding monopoly concerns.

Alphabet Class C (GOOG) vs. SPDR S&P 500 ETF (SPY)

Alphabet Class C Business Overview & Revenue Model

Company DescriptionAlphabet Inc. Class C (GOOG) is a leading global technology conglomerate headquartered in Mountain View, California. As the parent company of Google, it operates across various sectors including internet services, advertising, cloud computing, hardware, software, and artificial intelligence. Alphabet's core products and services encompass the Google search engine, YouTube, the Android operating system, Google Cloud, and a suite of productivity tools such as Google Workspace. The company also engages in diverse ventures through its Other Bets segment, which explores innovative projects like self-driving cars with Waymo and life sciences research with Verily.
How the Company Makes MoneyAlphabet Inc. primarily generates revenue through advertising, which accounts for the majority of its earnings. The company earns significant income from Google Ads, where businesses pay for ad placements on Google's search engine results pages and across its vast network of partner websites. YouTube also contributes to ad revenue through video advertisements. In addition to advertising, Alphabet earns money from its Google Cloud services, offering scalable and secure cloud solutions to businesses and organizations. The company's hardware products, such as Pixel phones and Google Nest smart home devices, contribute to its revenue streams. Furthermore, Alphabet's Other Bets segment, though not yet profitable, explores new technologies and potential future revenue sources. Strategic partnerships and collaborations with various industries enhance its earning potential and facilitate the development of innovative solutions.

Alphabet Class C Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q2-2025)
|
% Change Since: -0.87%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
Alphabet's Q2 2025 earnings call highlighted strong revenue growth driven by AI advancements across Search, YouTube, and Google Cloud. Despite increased operating expenses and supply constraints in cloud services, the company showed robust performance and demand for its AI product portfolio.
Q2-2025 Updates
Positive Updates
Robust Company-Wide Growth
Alphabet reported consolidated revenue of $96.4 billion, an increase of 14% year-over-year, with strong performance across Search, YouTube, and Google Cloud.
AI-Driven Search Expansion
AI Overviews and AI Mode have significantly increased user engagement, driving higher search queries globally and contributing to a 12% increase in Search and other revenues.
Google Cloud's Strong Performance
Google Cloud reported a 32% increase in revenues, reaching $13.6 billion, with a backlog of $106 billion, reflecting strong demand for AI product portfolio and infrastructure.
YouTube Revenue Growth
YouTube advertising revenues increased by 13% to $9.8 billion, driven by direct response advertising and strong user engagement with Shorts.
Increased Engagement with AI Products
The Gemini app and AI-powered tools in Google Workspace have seen significant growth in user engagement, with products like Google Vids reaching nearly 1 million monthly active users.
Waymo Expansion
Waymo expanded its service territories in Austin, Los Angeles, and San Francisco by approximately 50% and launched teen accounts in Phoenix.
Negative Updates
Ongoing Legal and Depreciation Expenses
Total operating expenses increased by 20% due to a $1.4 billion legal settlement and a significant increase in depreciation expense.
Network Advertising Revenue Decline
Network advertising revenue decreased by 1% to $7.4 billion.
Supply Constraints in Cloud Services
Despite strong demand, Google Cloud continues to face a tight supply environment, affecting capacity to meet customer demand.
Company Guidance
During the Alphabet Second Quarter 2025 Earnings Conference Call, the company provided several key metrics reflecting robust growth and strategic advancements. Alphabet reported consolidated revenue of $96.4 billion, marking a 14% increase year-over-year, with Google Services revenues reaching $83 billion, up 12%. Search revenues grew by 12% to $54.2 billion, driven primarily by retail and financial services. YouTube advertising revenues rose 13% to $9.8 billion, and Cloud revenue increased 32% to $13.6 billion, with its annual run rate exceeding $50 billion. The company highlighted AI features such as AI Mode and AI Overviews, which contributed to an increase in search queries by over 10% globally. Cloud backlog was reported at $106 billion, up 38% year-over-year, with significant growth in high-value deals. Additionally, YouTube Shorts reached over 200 billion daily views. Alphabet also announced an increase in CapEx expectations to $85 billion for 2025 to support growing demand, particularly in cloud infrastructure.

Alphabet Class C Financial Statement Overview

Summary
Alphabet demonstrates strong financial performance with robust revenue growth, high profitability, and a solid balance sheet. The income statement shows a TTM gross profit margin of 58.95% and a net profit margin of 31.11%. The balance sheet reflects a low debt-to-equity ratio of 0.10 and a high return on equity of 31.85%. Cash flow is healthy with a free cash flow growth of 9.35% TTM.
Income Statement
92
Very Positive
Alphabet's income statement shows robust financial health with high profitability and significant growth. The TTM (Trailing-Twelve-Months) gross profit margin is 58.95%, indicating efficient cost management. A strong net profit margin of 31.11% highlights excellent profitability. Revenue growth is commendable, with a 6.1% increase from the previous year. EBIT and EBITDA margins are solid at 32.67% and 40.33% respectively, showcasing strong operational performance.
Balance Sheet
88
Very Positive
The balance sheet reflects a strong financial position with a low debt-to-equity ratio of 0.10, suggesting minimal leverage risks. The return on equity (ROE) is impressive at 31.85%, indicating effective use of equity capital. The equity ratio is high at 72.28%, pointing to a strong capital structure with substantial shareholder's equity relative to total assets.
Cash Flow
85
Very Positive
Alphabet's cash flow statement demonstrates strong cash generation and prudent capital deployment. The free cash flow in TTM grew by 9.35% compared to the previous period. The operating cash flow to net income ratio is 1.16, indicating healthy cash flow from operations relative to net income. The free cash flow to net income ratio is 0.58, showcasing good free cash flow relative to net income, supporting future growth and investment.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue350.02B307.39B282.84B257.64B182.53B
Gross Profit203.71B174.06B156.63B146.70B97.80B
EBITDA135.39B97.97B85.16B103.52B61.91B
Net Income100.12B73.80B59.97B76.03B40.27B
Balance Sheet
Total Assets450.26B402.39B365.26B359.27B319.62B
Cash, Cash Equivalents and Short-Term Investments95.66B110.92B113.76B139.65B136.69B
Total Debt25.46B27.12B29.68B28.39B26.77B
Total Liabilities125.17B119.01B109.12B107.63B97.07B
Stockholders Equity325.08B283.38B256.14B251.63B222.54B
Cash Flow
Free Cash Flow72.76B69.50B60.01B67.01B42.84B
Operating Cash Flow125.30B101.75B91.50B91.65B65.12B
Investing Cash Flow-45.54B-27.06B-20.30B-35.52B-32.77B
Financing Cash Flow-79.73B-72.09B-69.76B-61.36B-24.41B

Alphabet Class C Technical Analysis

Technical Analysis Sentiment
Positive
Last Price191.51
Price Trends
50DMA
175.69
Positive
100DMA
168.61
Positive
200DMA
175.38
Positive
Market Momentum
MACD
4.86
Negative
RSI
73.72
Negative
STOCH
83.20
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOG, the sentiment is Positive. The current price of 191.51 is above the 20-day moving average (MA) of 182.30, above the 50-day MA of 175.69, and above the 200-day MA of 175.38, indicating a bullish trend. The MACD of 4.86 indicates Negative momentum. The RSI at 73.72 is Negative, neither overbought nor oversold. The STOCH value of 83.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GOOG.

Alphabet Class C Risk Analysis

Alphabet Class C disclosed 28 risk factors in its most recent earnings report. Alphabet Class C reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Alphabet Class C Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
89
Outperform
$2.32T20.4034.83%0.42%13.19%34.51%
85
Outperform
$2.32T20.2734.83%0.53%13.19%34.51%
82
Outperform
$1.79T27.8339.83%0.29%19.37%47.56%
80
Outperform
$25.57B13.7248.41%17.81%1175.52%
76
Outperform
$135.42B108.9824.28%16.07%
76
Outperform
$33.34B9.239.85%-1.33%32.92%
62
Neutral
$41.97B-1.66-12.07%3.33%2.07%-69.32%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GOOG
Alphabet Class C
193.20
24.85
14.76%
BIDU
Baidu
90.99
3.20
3.65%
META
Meta Platforms
714.80
262.94
58.19%
GOOGL
Alphabet Class A
192.17
25.70
15.44%
SPOT
Spotify
681.42
352.47
107.15%
PINS
Pinterest
37.67
-0.21
-0.55%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 23, 2025