Alphabet Class A (GOOGL) AI Stock Analysis

• Market Cap: $2.18T
• Dividend Yield: 0.47%
• Average Volume (3M): 41.71M
• Price to Earnings (P/E): 19.9
• Beta (1Y): 1.03
• 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: 39,027,414
• 30 Day Avg. Volume: 41,708,857
• PEG Ratio: -0.99
• Price to Book (P/B): 4.50
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.21
• Enterprise Value/Market Cap: 0.53
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 5.51
• Enterprise Value/Ebitda: 2.21
• 1Y Price Target: $199.11
• Price Target Upside: 12.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 38

• Rating: 84 Outperform
• Price Target: $197.00 ▲(11.08%Upside)

Alphabet's strong financial performance and strategic growth initiatives, particularly in AI and cloud services, are key strengths. The moderate technical and valuation scores suggest a balanced risk-reward profile. Positive earnings call insights and strategic corporate events further bolster the stock's outlook, despite some challenges in advertising revenue and expenses.

Positive Factors

AI Monetization

AI can expand overall search monetization by better understanding the intent behind complex and long-tail queries.

Mobile Engagement

Google's global mobile daily active users increased significantly, suggesting growth in mobile engagement.

Negative Factors

Market Dominance

Google's global search share declined marginally, indicating a slight loss in market dominance.

User Engagement

In the US, Google visits were down 2% year over year, showing challenges in maintaining user engagement.

Alphabet Class A Business Overview & Revenue Model

Company Description

Alphabet Inc. is a multinational conglomerate headquartered in Mountain View, California. It was created through a corporate restructuring of Google on October 2, 2015, and became the parent company of Google and several former Google subsidiaries. Alphabet operates in various sectors, including technology, life sciences, investment capital, and research and development. Its core products and services range from its search engine and advertising services to cloud computing, consumer electronics, and various other technology initiatives.

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 showcases exceptional financial performance with strong revenue growth, high profit margins, and a robust balance sheet. The income statement highlights a 16.9% revenue growth rate, a 30.9% net profit margin, and solid cash flow management, indicating financial stability and growth potential.

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
	EBIT
117.52B	112.39B	84.29B	74.84B	78.71B	41.22B
	EBITDA
149.88B	135.39B	97.97B	85.16B	103.52B	61.91B
	Net Income Common Stockholders
111.00B	100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
95.33B	95.66B	110.92B	113.76B	139.65B	136.69B
	Total Assets
475.37B	450.26B	402.39B	365.26B	359.27B	319.62B
	Total Debt
23.56B	25.46B	27.12B	29.68B	26.21B	25.08B
	Net Debt
300.00M	2.00B	3.07B	7.80B	5.26B	-1.39B
	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: 177.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 177.35 is above the 20-day moving average (MA) of 169.83, above the 50-day MA of 161.32, and above the 200-day MA of 171.09, indicating a bullish trend. The MACD of 3.78 indicates Negative momentum. The RSI at 64.20 is Neutral, neither overbought nor oversold. The STOCH value of 85.68 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
GOOG	87 Outperform	$2.18T	20.07	34.79%	0.47%	13.02%	37.73%
GOOGL	84 Outperform	$2.18T	19.92	34.79%	0.47%	13.02%	37.73%
META	82 Outperform	$1.77T	27.40	39.83%	0.30%	19.37%	47.56%
PINS	77 Outperform	$23.76B	12.62	48.41%	―	17.81%	1175.52%
SPOT	76 Outperform	$139.21B	112.03	24.28%	―	16.07%	―
BIDU	74 Outperform	$30.61B	8.67	9.85%	―	-1.33%	32.92%
Sector *	61 Neutral	$14.79B	5.90	-3.99%	6.20%	2.67%	-30.30%

Alphabet Class A Corporate Events

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.

Alphabet Class A to Acquire Wiz for $32 Billion

On March 18, 2025, Google LLC announced its agreement to acquire Wiz, Inc., a prominent cloud security platform, for $32 billion in an all-cash transaction. This acquisition, expected to close in 2026, will integrate Wiz into Google Cloud, enhancing its security offerings and multicloud capabilities. The acquisition aims to bolster Google’s position in the rapidly growing cloud security market by improving security automation and reducing costs for customers. Wiz’s solutions will remain compatible with major cloud platforms, and the deal underscores the increasing importance of cybersecurity in the AI era.