Alphabet Class A (GOOGL) AI Stock Analysis

• Market Cap: $3.88T
• Dividend Yield: 0.25%
• Average Volume (3M): 41.80M
• Price to Earnings (P/E): 31.7
• Beta (1Y): 1.04
• Revenue Growth: 13.55%
• EPS Growth: 34.26%
• Country: US
• Employees: 185,719
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 2.87
• Shares Outstanding: 5,818,000,000
• 10 Day Avg. Volume: 47,544,375
• 30 Day Avg. Volume: 41,801,945
• PEG Ratio: 0.59
• Price to Book (P/B): 7.17
• Price to Sales (P/S): 6.66
• P/FCF Ratio: 32.05
• Enterprise Value/Market Cap: 0.75
• Enterprise Value/Revenue: 7.55
• Enterprise Value/Gross Profit: 12.75
• Enterprise Value/Ebitda: 16.94
• 1Y Price Target: $320.15
• Price Target Upside: -0.35% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 36
• EPS Forecast (FY): 10.59
• Revenue Forecast (FY): $399.95B

• Rating: 81 Outperform
• Price Target: $371.00 ▲(15.48% Upside)

Alphabet's strong financial performance and strategic investments in AI and cloud services are key strengths, driving robust revenue growth. Technical indicators show bullish momentum, though high valuation metrics suggest caution. The earnings call and recent corporate events further support a positive outlook, despite some cost-related challenges.

Positive Factors

AI Innovations and Adoption

The successful launch and adoption of AI innovations enhance Alphabet's competitive edge, driving user engagement and opening new revenue streams.

Google Cloud Growth

Strong growth in Google Cloud underscores Alphabet's successful diversification beyond advertising, positioning it well in the growing cloud market.

Record Free Cash Flow

Robust free cash flow generation provides Alphabet with financial flexibility to invest in growth opportunities and weather economic uncertainties.

Negative Factors

Increased Operating Expenses

Rising operating expenses, including significant legal charges, could pressure margins and impact profitability if not managed effectively.

Network Advertising Revenue Decline

A decline in network advertising revenue indicates potential challenges in maintaining growth in a key revenue segment, affecting overall revenue stability.

Supply Constraints in Cloud

Ongoing supply constraints in Google Cloud could limit growth potential, impacting Alphabet's ability to capitalize on strong demand in the cloud sector.

Alphabet Class A Business Overview & Revenue Model

Company Description

Alphabet Class A (GOOGL) is the parent company of Google and several other subsidiaries. Founded in 1998, Alphabet operates primarily in the technology sector, focusing on internet-related services and products. Its core offerings include online advertising, cloud computing, software, hardware, and various digital services. Google Search, YouTube, Android, and Google Cloud are among its most prominent services, catering to both individual consumers and enterprises.

How the Company Makes Money

Alphabet generates the majority of its revenue through advertising, primarily from its Google Ads platform, where businesses pay to display ads on Google search results and across its extensive network of websites. In addition to advertising, Alphabet earns revenue from its Google Cloud services, which provide businesses with cloud storage, computing power, and data analytics solutions. Other significant revenue streams include sales from hardware products like Google Pixel phones, Nest smart home devices, and subscription services such as YouTube Premium. Furthermore, Alphabet has formed partnerships with various companies and developers to expand its ecosystem, contributing to its earnings through collaborations and revenue-sharing agreements.

Alphabet Class A Financial Statement Overview

Summary

Alphabet demonstrates strong financial health with robust profitability, low leverage, and high returns on equity. The income statement reflects solid revenue growth and efficient operations, while the balance sheet shows financial stability. Cash flow generation is healthy, though there is room for improvement in free cash flow conversion.

Income Statement

Alphabet's income statement shows strong profitability with a TTM gross profit margin of 58.94% and a net profit margin of 31.12%. The company has maintained a healthy revenue growth rate of 3.79% in the TTM, indicating consistent growth. EBIT and EBITDA margins are robust at 37.71% and 42.47% respectively, reflecting efficient operations and cost management.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.11, indicating low leverage and financial stability. Return on equity is impressive at 34.31%, showcasing effective use of shareholder funds. The equity ratio stands at 72.11%, highlighting a strong equity base relative to total assets.

Cash Flow

Cash flow metrics are strong with a free cash flow growth rate of 10.23% in the TTM, indicating healthy cash generation. The operating cash flow to net income ratio is 1.53, suggesting efficient cash conversion. However, the free cash flow to net income ratio of 0.50 indicates room for improvement in translating profits into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	385.48B	350.02B	307.39B	282.84B	257.64B	182.53B
Gross Profit	228.09B	203.71B	174.06B	156.63B	146.70B	97.80B
EBITDA	171.74B	135.39B	97.97B	85.16B	103.52B	61.91B
Net Income	124.25B	100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet
Total Assets	536.47B	450.26B	402.39B	365.26B	359.27B	319.62B
Cash, Cash Equivalents and Short-Term Investments	98.50B	95.66B	110.92B	113.76B	139.65B	136.69B
Total Debt	33.71B	25.46B	27.12B	29.68B	28.39B	26.77B
Total Liabilities	149.60B	125.17B	119.01B	109.12B	107.63B	97.07B
Stockholders Equity	386.87B	325.08B	283.38B	256.14B	251.63B	222.54B
Cash Flow
Free Cash Flow	73.55B	72.76B	69.50B	60.01B	67.01B	42.84B
Operating Cash Flow	151.42B	125.30B	101.75B	91.50B	91.65B	65.12B
Investing Cash Flow	-84.69B	-45.54B	-27.06B	-20.30B	-35.52B	-32.77B
Financing Cash Flow	-63.45B	-79.73B	-72.09B	-69.76B	-61.36B	-24.41B

Alphabet Class A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 321.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 321.27 is above the 20-day moving average (MA) of 301.23, above the 50-day MA of 274.69, and above the 200-day MA of 205.18, indicating a bullish trend. The MACD of 13.73 indicates Negative momentum. The RSI at 70.08 is Negative, neither overbought nor oversold. The STOCH value of 68.58 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	81 Outperform	$3.88T	31.69	35.45%	0.25%	13.55%	34.26%
META	80 Outperform	$1.70T	29.75	32.64%	0.31%	21.27%	6.16%
MSFT	80 Outperform	$3.59T	34.37	32.24%	0.71%	15.59%	15.89%
AAPL	79 Outperform	$4.12T	37.34	171.42%	0.37%	6.43%	22.85%
AMZN	71 Outperform	$2.45T	32.43	24.33%	―	11.48%	50.70%
BIDU	64 Neutral	$42.96B	39.47	3.02%	―	-3.49%	-60.83%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Alphabet Class A Corporate Events

Alphabet Closes $17.5B and €6.5B Senior Notes Offering

On November 6, 2025, Alphabet Inc. successfully closed its concurrent underwritten public offerings of $17.5 billion in U.S. dollar-denominated senior notes and €6.5 billion in euro-denominated senior notes. This strategic financial move is expected to bolster Alphabet’s financial position and provide capital for future investments, potentially impacting its market standing and stakeholder interests.