Alphabet Class A (GOOGL) AI Stock Analysis

• Market Cap: $2.14T
• Dividend Yield: 0.48%
• Average Volume (3M): 42.25M
• Price to Earnings (P/E): 19.6
• Beta (1Y): 1.06
• Revenue Growth: 13.02%
• EPS Growth: 37.73%
• Country: US
• Employees: 185,719
• Sector: Communication Services
• Sector Strength: 90
• Industry: Internet Content & Information
• EPS (TTM): 2.81
• Shares Outstanding: 5,820,000,000
• 10 Day Avg. Volume: 50,157,294
• 30 Day Avg. Volume: 42,252,772
• PEG Ratio: 1.60
• Price to Book (P/B): 5.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.09
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 1.47
• Enterprise Value/Gross Profit: 9.63
• Enterprise Value/Ebitda: 3.87
• 1Y Price Target: $200.94
• Price Target Upside: 12.48% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 38

• Rating: 83 Outperform
• Price Target: $199.00 ▲(11.40%Upside)

Alphabet's strong financial performance, marked by high growth and profitability, is the primary driver of its stock score. The technical analysis and valuation suggest a stable market position with reasonable pricing for its growth prospects. Positive earnings call highlights and strategic corporate events further support the favorable outlook, despite some challenges in advertising revenue.

Positive Factors

AI Infrastructure Endorsement

OpenAI's use of TPUs is a key endorsement of Google's tech infrastructure capabilities, highlighting its leading position within the ASIC ecosystem.

Cloud Business Growth

Rising developer familiarity and increased adoption of TPUs by companies outside of Google could drive further growth for Google's Cloud business.

Non-Search Segment Potential

Google's non-Search segments like Cloud, YouTube, and Waymo are underappreciated, and their growth could drive stock appreciation even if core search slows.

Negative Factors

Engagement Loss Concerns

Concerns about growing engagement losses to platforms like ChatGPT could negatively affect near-term click results for Google.

Regulatory Risks

Significant concerns on the DoJ search case outcome could result in material iOS share and revenue declines for Google if restrictions on paying TAC for default placement are imposed.

Search Competition Concerns

The ongoing debate about potential disruption to Google's search by new entrants continues to impact the valuation multiples investors are willing to pay.

Alphabet Class A Business Overview & Revenue Model

Company Description

Alphabet Inc. provides various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment offers products and services, including ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play store; and Fitbit wearable devices, Google Nest home products, Pixel phones, and other devices, as well as in the provision of YouTube non-advertising services. The Google Cloud segment offers infrastructure, platform, and other services; Google Workspace that include cloud-based collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells health technology and internet services. The company was founded in 1998 and is headquartered in Mountain View, California.

How the Company Makes Money

Alphabet Inc. primarily generates revenue through its subsidiary Google, with the majority coming from advertising services. Google's advertising revenue is driven by ads displayed on its search engine, as well as on partner websites through the Google AdSense program. Additionally, Alphabet earns substantial income from its YouTube platform, which monetizes through advertisements and subscription services like YouTube Premium. The company also generates revenue from its Google Cloud services, which offer cloud computing solutions to businesses. Other Alphabet ventures, such as its 'Other Bets' segment, contribute to revenue through varied business models, including investments in life sciences and technology innovations, though these are less significant compared to Google's advertising and cloud services. Key partnerships and collaborations, such as those with smartphone manufacturers for Android OS, also play a role in its revenue generation.

Alphabet Class A Financial Statement Overview

Summary

Alphabet demonstrates exceptional financial performance with impressive revenue growth, high profitability, and a strong balance sheet characterized by low leverage and high equity. The company's robust cash flow management further solidifies its financial stability, supporting future growth and shareholder returns.

Income Statement

Alphabet's income statement shows impressive financial health with a strong gross profit margin of 58.6% and a net profit margin of 30.9% for TTM. The company’s revenue growth rate is robust at 16.9% over the past year, indicating strong market demand and operational efficiency. The EBIT margin of 32.7% and EBITDA margin of 37.3% further highlight Alphabet's profitability. This combination of growth and high margins reflects a well-managed, profitable enterprise with a strong competitive position in the industry.

Balance Sheet

Alphabet maintains a solid balance sheet with a low debt-to-equity ratio of 0.07, indicating minimal financial leverage and a strong equity position. The equity ratio of 72.6% reflects a robust capital structure primarily funded by equity. Return on Equity (ROE) is high at 32.1%, showing efficient use of shareholder funds to generate profits. Overall, Alphabet's balance sheet is strong, with ample liquidity and low financial risk.

Cash Flow

The cash flow statement reveals strong cash management practices with a free cash flow growth rate of 2.9%, indicating Alphabet's ability to generate and grow cash flows. The operating cash flow to net income ratio of 1.2 shows that the company converts a significant portion of its income to cash, enhancing its financial flexibility. Additionally, the free cash flow to net income ratio of 0.67 suggests solid cash flow generation relative to profits, supporting future growth initiatives and shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	359.71B	350.02B	307.39B	282.84B	257.64B	182.53B
Gross Profit	210.76B	203.71B	174.06B	156.63B	146.70B	97.80B
EBITDA	149.88B	135.39B	97.97B	85.16B	103.52B	61.91B
Net Income	111.00B	100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet
Total Assets	475.37B	450.26B	402.39B	365.26B	359.27B	319.62B
Cash, Cash Equivalents and Short-Term Investments	95.33B	95.66B	110.92B	113.76B	139.65B	136.69B
Total Debt	23.56B	25.46B	27.12B	29.68B	26.21B	25.08B
Total Liabilities	130.11B	125.17B	119.01B	109.12B	107.63B	97.07B
Stockholders Equity	345.27B	325.08B	283.38B	256.14B	251.63B	222.54B
Cash Flow
Free Cash Flow	74.88B	72.76B	69.50B	60.01B	67.01B	42.84B
Operating Cash Flow	132.60B	125.30B	101.75B	91.50B	91.65B	65.12B
Investing Cash Flow	-53.17B	-45.54B	-27.06B	-20.30B	-35.52B	-32.77B
Financing Cash Flow	-80.22B	-79.73B	-72.09B	-69.76B	-61.36B	-24.41B

Alphabet Class A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 178.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOGL, the sentiment is Positive. The current price of 178.64 is above the 20-day moving average (MA) of 173.49, above the 50-day MA of 167.17, and above the 200-day MA of 172.24, indicating a bullish trend. The MACD of 2.24 indicates Negative momentum. The RSI at 60.35 is Neutral, neither overbought nor oversold. The STOCH value of 77.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GOOGL.

Alphabet Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOGL	83 Outperform	$2.14T	19.61	34.79%	0.48%	13.02%	37.73%
META	82 Outperform	$1.81T	28.05	39.83%	0.29%	19.37%	47.56%
GOOG	81 Outperform	$2.14T	19.73	34.79%	0.47%	13.02%	37.73%
PINS	80 Outperform	$24.14B	12.98	48.41%	―	17.81%	1175.52%
SPOT	76 Outperform	$145.04B	114.64	24.28%	―	16.07%	―
BIDU	71 Outperform	$29.82B	8.57	9.85%	―	-1.33%	32.92%
Sector *	61 Neutral	$41.07B	-0.81	-14.21%	3.83%	2.45%	-73.69%

Alphabet Class A Corporate Events

Alphabet Stockholders Re-elect Directors at Annual Meeting

At Alphabet Inc.’s Annual Meeting of Stockholders on June 6, 2025, stockholders voted on fifteen proposals, including the election of directors and various stockholder proposals. The election of directors saw the re-election of key figures such as Larry Page and Sundar Pichai. However, several stockholder proposals, including those related to shareholder rights, financial performance policies, and AI-related reports, were not approved. The ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was approved.

The most recent analyst rating on (GOOGL) stock is a Buy with a $200.00 price target. To see the full list of analyst forecasts on Alphabet Class A stock, see the GOOGL Stock Forecast page.

Alphabet Inc. Completes €6.75 Billion Bond Offering

On May 6, 2025, Alphabet Inc. successfully completed its euro-denominated bond offering, raising a total of €6.75 billion through the issuance of notes with varying maturities and interest rates. This strategic financial move is expected to enhance Alphabet’s capital structure and provide additional resources for its ongoing operations and growth initiatives.