The article argues Alphabet is the cheapest Magnificent Seven stock, trading at just over 16 times this year's analyst-projected earnings of $20.59 per share. That projection includes a one-time $6.26-per-share second-quarter accounting gain tied to its investments in SpaceX and Anthropic; without it, EPS would be $14.33 and P/E a little above 23. By comparison, Nvidia's 2026 P/E is 24, Microsoft's is 27 on $19.76 EPS, and Amazon is about 27 times excluding its Anthropic gain, while Nvidia is 14 times its expected 2027 EPS of $15.80. The author argues Alphabet's position is more resilient, citing search advertising as a steady cash generator, Google Cloud's Q2 revenue up 82%, and a cloud contracted backlog of $514 billion.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
GOOGLvaluationearningscloud computing
Open a keyword to see other news on the same topic.
Related tickers and likely impact
MSFT
• NeutralMicrosoft
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 10/23/2026 | 524.53 |
| Change that session | +0.66% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- One Reason Alphabet Stock Looks Better Than Its Price
Alphabet (GOOGL) shares fell 1.2% over the six months to October 21, 2026, while the S&P 500 gained 9.3%, even as Google Cloud grew quickly: second-quarter fiscal 2026 revenue reached $24.8 billion, up 82%, and operating margin rose to 35.6% from 20.7%. Cloud's backlog reached $514 billion at the end of June 2026. However, Alphabet spent $44.9 billion on capital projects in the quarter, more than the $39.1 billion of operating cash flow, and raised its 2026 capex guidance to $195–205 billion from $180–190 billion. The main risks cited are limited capacity and costs rising faster than backlog converts to revenue, with most revenue from TPU system deals expected in 2027. Alphabet's third-quarter report is expected on October 28, 2026.
- Prediction: Alphabet Stock Is Going to Soar After Oct. 28
Alphabet is set to report its third-quarter results on Oct. 28, and the article argues the stock looks reasonably valued ahead of the release. Google Search, which accounts for more than half of revenue, has been boosted by AI features such as AI Overviews and AI Mode, with AI Mode surpassing 1 billion monthly users, and second-quarter revenue hit a record $63.3 billion, up 17% year over year. Google Cloud posted $24.8 billion in second-quarter revenue, up 84%, and a $514 billion order backlog as of June 30, a figure analysts will watch as an indicator of future revenue. Second-quarter EPS rose 294% to $9.11, mostly due to a one-off gain from the SpaceX IPO that lifted the fair value of a $900 million 2015 investment above $90 billion. Wall Street expects third-quarter EPS of about $3.02 (up 5%) and 2027 EPS of $14.98, a forward P/E of 23.4 versus 22.1 for the Nasdaq-100, and the author argues the report could support further upside if search and cloud momentum continues.
- Is Alphabet's (GOOGL) Cloud Growth Masking a Paper EPS Gain?
Alphabet (NASDAQ:GOOGL) reported Q2 2026 diluted EPS of $9.11, up 294%, but $6.26 of that came from an unrealized gain on equity securities. Free cash flow was negative $5.9 billion as capital spending reached $44.9 billion for data centers. Search grew 17% to $63.3 billion, while Google Cloud revenue surged 82% to $24.8 billion with operating income of $8.8 billion, up from $2.8 billion a year earlier. Total operating income rose 30% to $40.8 billion, lifting operating margin to 34%. Alphabet raised $49.6 billion in net proceeds from stock and mandatory convertible preferred sales and bought back no stock in the quarter; at 29.04 times forward earnings, the article argues there is little room for error.
- Alphabet Stock Is Up 26.5% Over the Past Year. Still a Buy at $320?
Alphabet stock is up 26.5% over the past year, closing at $320.21 on October 23, but remains 20.5% below its record close of $402.62 on May 13. The slide since May followed an $80 billion equity plan announced in June and a raised 2026 capex guidance of $195 billion to $205 billion, which pushed shares down 7.13% on July 23. According to Scotiabank estimates cited by Reuters, Anthropic has committed roughly $111 billion to Google Cloud, about 22% of the unit's disclosed backlog. Google Cloud CEO Thomas Kurian said the payback period on AI servers is less than 2 years in aggregate. Analysts expect revenue to rise from $500.14 billion in 2026 to $626.82 billion in 2027, with third-quarter results due October 28.
- The Bet Alphabet Holders Made
Alphabet shareholders earned a 23.5% return over the past year including dividends. On 23 October 2025, when the shares cost US$254 at the start of the period, analysts were debating how far AI-powered cloud services and infrastructure spending could reshape earnings. A bullish view set a Fair Value of US$291 based on 13.8% revenue growth and a future P/E of 26.8x, while a more cautious view put it at US$234, citing 11.4% growth and concern that capital expenditure near US$85b could pressure margins. In Q2 2026, revenue reached US$119.8b (versus US$96.4b) and net income US$112.1b (versus US$28.2b), with net margin rising from 29.2% to 93.6%. With shares around US$320, up roughly 24% over the past year, the article notes the selected Fair Value sits below the market price, implying that buyers at today's price assume AI investment will produce strong long-run cash returns, while rising capital spending and debt remain key questions.
- Alphabet (GOOGL) vs. MSFT and AMZN: Can AI Investments and Google Cloud Growth Unlock a 26% Upside?
The article summarizes a bullish case on Alphabet (GOOGL) from Astute Optics - US's Substack. Shares traded at $334.76 as of October 21st 2026, with trailing and forward P/E of 17.62 and 22.83, and gained 35.20% over 12 months versus 20.50% for Amazon. Bulls point to Google Cloud revenue jumping 82% to $24.8 billion and quarterly revenue rising 24% to $119.8 billion, backed by a net cash position of $144.3 billion, while capital spending plans were raised to $195 billion to $205 billion. The average analyst price target of $422 implies roughly 26% upside, but the article warns of risks including AI spending not converting into earnings, regulatory scrutiny, AI search competition and advertising budget cuts, given over 70% of 2025 revenue came from online advertising.
Related markets
Latest news
- Realty Income Yields More Than Quintuple the S&P 500. Here's What a $10,000 Investment Produces in Yearly Dividends.
Realty Income (O) currently offers a forward dividend yield of 5.9%, more than five times the S&P 500's yield of under 1.1%. As a REIT, it must distribute 90% of its taxable income to investors, which explains its unusually high yield. Based on a monthly dividend of $0.2715 (about $3.26 per share annually) and a share price of $55.76, a $10,000 investment buys about 179 shares and generates roughly $583.54 per year, or about $48.63 per month. The company has raised its payout every year since going public in 1994, and its AFFO rose 3.8% year over year in Q2 2026, with a payout ratio of about 74.5% that the article considers sustainable. However, dividend growth has averaged in the low single digits over the past decade, so price appreciation may remain modest, and performance depends heavily on interest rate trends.
- JPMorgan Has Nearly $900 Million in Tokenized Funds on Ethereum and Solana. Which Chain Benefits More?
JPMorgan has placed nearly 900 million USD in tokenized funds across Ethereum and Solana. According to Sentora, the JLTXX fund holds about 792 million USD across both networks, while the MONY fund is estimated at 103.1 million USD on Ethereum alone. Within one week, Kinexys brought its JPM Coin deposit token (JPMD) to Ethereum on October 19, 2026, and J.P. Morgan Asset Management launched MONY and JLTXX on Solana on October 22, even as ETH fell 2.1% to 2,333 USD and SOL dropped 1.5% to 101 USD. The article notes that the announcements committed no one to holding ETH or SOL, Sentora still shows no JPMD supply on Ethereum, and Solana has no on-chain cash option yet, while fees from these funds are modest relative to JPMorgan's core businesses. Ethereum currently leads in the size of JPMorgan's tokenized funds.
- Is It Too Late to Buy Energy Transfer After a 25% Rally? History Has a Clear Answer.
Energy Transfer (ET) is up 25% year to date and offers a 6.7% dividend yield, after energy prices and equities surged in the first quarter as the war in Iran unfolded. As of October 21, the stock was 7.8% below its 52-week high, short of the 10% correction threshold and far from a bear market; the article notes that healthy pullbacks in strongly trending stocks can range from 5% to 15%. Shares have gained 185.1% over five years, outperforming the Alerian MLP Infrastructure Index, and investors bought every past dip. The author argues the dividend could cushion a broader market decline, so the recent pullback looks normal and may present an opportunity for patient long-term investors.
- Forget Ford's Lucrative Dividend. GM Has a Different and Perhaps Better Way to Reward Investors.
General Motors (GM) has cut its shares outstanding from roughly 1.395 billion at the start of 2023 to 849 million as of Q3, a reduction of nearly 40% through buybacks, and its stock has risen almost 130% since the start of 2023. Its Q3 report revealed a new multiyear buyback authorization of $20 billion. In a simple hypothetical where earnings stay flat and $20 billion buys back shares at $80 each, the share count would fall to 599 million (a 29.4% cut) and EPS could rise 41.7%, though the article stresses this is not a forecast. GM generated $5.9 billion in adjusted automotive free cash flow in Q3 and raised its 2026 guidance to $11.5-12.5 billion from $9.5-11.5 billion. Morningstar puts GM's total yield, including buybacks and dividends, at 12.59% versus 5.7% for Ford, and the author argues this deserves more recognition than Ford's dividend.
- SpaceX Could Be a Game Changer for These 2 Dividend Stocks
SpaceX is reportedly planning a nationwide mobile network in the U.S. to compete with established carriers, after agreeing to buy a low-band spectrum portfolio from Grain Management for $8 billion. Bloomberg reports the company is seeking access to 80,000 U.S. cell tower sites and is in talks with Crown Castle. Tower returns rise sharply with each additional tenant, but SpaceX has not signed definitive leases, and TD Cowen estimates a nationwide build-out would cost over $80 billion. Crown Castle could benefit most, while the author leans toward American Tower for its more diversified platform.
- Ukraine disputes Elon Musk’s claim that its military violated Starlink terms during drone operations
Ukrainian defense adviser Serhii Beskrestnov disputes Elon Musk's claim that Ukraine's military violated Starlink's terms of service in drone strikes. He says Ukrainian drones using Starlink have been limited to speeds of 70 to 90 km/h (roughly 43 to 56 mph) for months, making deep-strike operations physically impossible. Ukraine says the restricted high-speed service disrupted its drone air defense during Russian attacks, and that service has since been restored. Musk has not explained why Ukraine was not notified before the restrictions were imposed. The report also cites Starlink revenue of $5.25 billion in the third quarter of 2026, and notes that Ukraine and its allies are seeking sovereign satellite alternatives.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.