Alphabet Class A (GOOGL) AI Stock Analysis

• Market Cap: $2.58T
• Dividend Yield: 0.38%
• Average Volume (3M): 34.82M
• Price to Earnings (P/E): 22.7
• Beta (1Y): 1.08
• Revenue Growth: 13.19%
• EPS Growth: 34.51%
• Country: US
• Employees: 185,719
• Sector: Communication Services
• Sector Strength: 89
• Industry: Internet Content & Information
• EPS (TTM): 2.31
• Shares Outstanding: 5,817,000,000
• 10 Day Avg. Volume: 28,780,752
• 30 Day Avg. Volume: 34,823,789
• PEG Ratio: 0.62
• Price to Book (P/B): 7.17
• Price to Sales (P/S): 6.66
• P/FCF Ratio: 32.05
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: 5.64
• Enterprise Value/Gross Profit: 9.58
• Enterprise Value/Ebitda: 13.29
• 1Y Price Target: $216.87
• Price Target Upside: 1.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 35

• Rating: 81 Outperform
• Price Target: $246.00 ▲(15.54% Upside)

Alphabet's strong financial performance and positive earnings call are the most significant factors contributing to its high score. The company's robust growth in AI and cloud services, along with a solid balance sheet, supports its long-term prospects. While technical indicators suggest a potential pullback due to overbought conditions, the overall outlook remains positive. The valuation is reasonable, though the low dividend yield may deter income-focused investors.

Positive Factors

AI Innovation

Evolving AI features being directly integrated on-device and with multimodal generative capabilities are increasing utility and expanding the array of tasks/services that can be executed by AI.

AI Leadership

Alphabet is the AI leader in the U.S. and globally, which should produce longer-term sustainable revenue growth across all segments, including Search & Other, YouTube.

Regulatory Outlook

The consensus was that Judge Amit Mehta will not impose a breakup of GOOGL.

Negative Factors

Ad-Tech Business Risk

DC experts largely agreed that the DOJ will push for a structural breakup of Google’s AdTech stack.

Data Sharing Regulations

New data sharing requirements could dilute Google’s data advantage, undermining the company’s differentiated ad stack and intensifying search competition.

Legal Challenges

The U.S. District Court has found Google guilty of illegally maintaining its search monopoly in general search and search text advertising via exclusionary default agreements.

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 generates revenue primarily through its advertising business, which accounts for the vast majority of its earnings. Google Ads, which includes search ads and display ads across various platforms, allows businesses to promote their products and services to targeted audiences, driving significant ad spend. Additionally, YouTube generates revenue through ad placements and subscription services like YouTube Premium. Another growing revenue stream comes from Google Cloud, which offers cloud computing services to businesses and organizations, contributing to the company's diversification beyond advertising. Alphabet also earns money from hardware sales, including devices like Google Pixel smartphones and Nest smart home products. Partnerships with other companies, such as collaborations with device manufacturers and advertisers, further enhance its revenue potential.

Alphabet Class A Financial Statement Overview

Summary

Alphabet's financial performance is strong, with consistent revenue growth, robust profitability, and a solid balance sheet. The company's income statement reveals a significant revenue growth rate and high profit margins, while its balance sheet shows low leverage risks and high return on equity. Cash flow management is effective despite a slight reduction in free cash flow.

Income Statement

Alphabet's income statement shows strong performance with a consistent increase in total revenue over recent years. The TTM period indicates a significant revenue growth rate of approximately 6.11% from 2024 to 2025. The gross profit margin remains robust at around 58.93%, and the net profit margin is impressive at 31.11%. Both EBIT and EBITDA margins are also strong, indicating efficient cost management and operational excellence.

Balance Sheet

Alphabet's balance sheet reflects financial stability and a sound capital structure. The debt-to-equity ratio stands at a low 0.10, indicating low leverage risks. The return on equity (ROE) is high at 31.85%, showcasing strong profitability for shareholders. The equity ratio is solid at 72.29%, highlighting a strong equity base relative to total assets.

Cash Flow

The company's cash flow statement reveals robust cash generation capabilities. Despite a decrease in free cash flow from 2024 to 2025, the operating cash flow to net income ratio is strong at 1.16, indicating effective cash conversion. The free cash flow to net income ratio is also solid at 0.58, reflecting good cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	371.40B	350.02B	307.39B	282.84B	257.64B	182.53B
Gross Profit	218.91B	203.71B	174.06B	156.63B	146.70B	97.80B
EBITDA	157.75B	135.39B	97.97B	85.16B	103.52B	61.91B
Net Income	115.57B	100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet
Total Assets	502.05B	450.26B	402.39B	365.26B	359.27B	319.62B
Cash, Cash Equivalents and Short-Term Investments	95.15B	95.66B	110.92B	113.76B	139.65B	136.69B
Total Debt	41.67B	25.46B	27.12B	29.68B	28.39B	26.77B
Total Liabilities	139.14B	125.17B	119.01B	109.12B	107.63B	97.07B
Stockholders Equity	362.92B	325.08B	283.38B	256.14B	251.63B	222.54B
Cash Flow
Free Cash Flow	66.73B	72.76B	69.50B	60.01B	67.01B	42.84B
Operating Cash Flow	133.71B	125.30B	101.75B	91.50B	91.65B	65.12B
Investing Cash Flow	-74.93B	-45.54B	-27.06B	-20.30B	-35.52B	-32.77B
Financing Cash Flow	-65.16B	-79.73B	-72.09B	-69.76B	-61.36B	-24.41B

Alphabet Class A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 212.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 212.91 is above the 20-day moving average (MA) of 202.74, above the 50-day MA of 190.20, and above the 200-day MA of 178.20, indicating a bullish trend. The MACD of 5.53 indicates Negative momentum. The RSI at 74.20 is Negative, neither overbought nor oversold. The STOCH value of 88.28 is Negative, 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
META	87 Outperform	$1.86T	26.75	40.65%	0.28%	19.38%	40.62%
MSFT	84 Outperform	$3.77T	37.14	33.28%	0.66%	14.93%	15.50%
GOOGL	81 Outperform	$2.58T	22.68	34.83%	0.38%	13.19%	34.51%
AMZN	81 Outperform	$2.44T	34.95	24.77%	―	10.87%	56.13%
AAPL	80 Outperform	$3.45T	35.29	149.81%	0.44%	5.97%	0.15%
BIDU	75 Outperform	$31.53B	8.75	10.33%	―	-1.32%	42.56%
Sector *	60 Neutral	$44.01B	4.30	-12.81%	4.08%	1.86%	-42.71%

Alphabet Class A Corporate Events

Alphabet Reports Strong Q2 2025 Financial Results

On July 23, 2025, Alphabet Inc. announced its financial results for the second quarter of 2025, showing a 14% year-over-year increase in revenues to $96.4 billion. The company experienced strong growth across its Google Services and Google Cloud segments, with Google Cloud revenues rising by 32% due to advancements in AI and cloud solutions. Operating income and net income also saw significant increases, with operating margins benefiting from revenue growth and expense efficiencies. The announcement highlights Alphabet’s strategic focus on AI and cloud services, positioning the company for continued growth and investment in capital expenditures.

Alphabet’s Settlement in Stockholder Derivative Action Approved

On July 8, 2025, the United States District Court for the Northern District of California preliminarily approved a settlement in a stockholder derivative action involving Alphabet Inc. The litigation alleged breaches of fiduciary duties by certain officers and directors, accusing them of exposing the company to antitrust investigations and enforcement actions. The settlement, which benefits Alphabet rather than individual stockholders, resolves claims related to anticompetitive business practices in the company’s search, Ad Tech, and Android operations. The defendants have denied all allegations, and the court will hold a settlement hearing on September 30, 2025, to consider the approval of the settlement terms.

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.