Alphabet has beaten EPS estimates for 11 straight quarters and grew revenue 24.2% last quarter to $119.80 billion, yet the stock trades at about 15 times earnings. Google Cloud revenue rose 82% to $24.77 billion and Search rose 17% to $63.27 billion, while operating income climbed 30.4% to $40.77 billion. Spending is rising sharply: Q2 capex reached $44.92 billion, free cash flow was -$5.86 billion, and long-term debt rose from $46.5 billion to $98.2 billion. Alphabet also stopped buybacks and raised $49.6 billion in net equity proceeds, which dilutes shareholders. The author keeps buying because he believes the market still prices the company like a mature ad business, while management guided to $175 billion to $185 billion in 2026 capex.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
Alphabetvaluationcloud computingAI investment
Open a keyword to see other news on the same topic.
Related tickers and likely impact
GOOGL
▲ Likely positiveAlphabet Inc. (Class A)
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.3T |
| Close on 10/20/2026 | 340.28 |
| Change that session | -1.13% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Prediction: AI Could Transform This Magnificent 7 Stock Over the Next 3 Years
Google's revenue in its latest quarter reached $119.80B, up 24.2%, and Google Cloud grew 82% to $24.77B, but capex doubled to $44.92B, pushing free cash flow to -$5.86B. Long-term debt rose from $46.5B to $98.2B, and buybacks were suspended in Q2 2026. Shares trade at $347.86, up 12.03% year to date and 13.9% below their 52-week high of $403.96, while the consensus target of 62 analysts is $420.36. The article's model sets a base case of $438.32 (26.01% upside), and says reaching $500 by 2029 requires cloud backlog to convert to revenue on schedule, Gemini 4 keeping Google at the frontier, and free cash flow turning positive again.
- Better Buffett Stock: Alphabet vs. Apple
The article argues Alphabet is the better buy, though the answer may depend on whether investors are bullish on AI. Alphabet is going all-in on AI and plans to spend about $200 billion on data center capital expenditures this year, while Apple is using Google's Gemini model on its devices instead of rapidly expanding its own AI computing power. Apple trades at 36 times fiscal 2027 earnings, its most expensive valuation in several years, while Alphabet trades at 22 times next year's earnings. The article notes that Berkshire has been buying Alphabet stock recently rather than Apple.
- 2 "Magnificent Seven" Stocks to Buy and Hold for the Rest of the Decade
The author would buy Alphabet (GOOGL, GOOG) and Amazon (AMZN) to hold for the rest of the decade, arguing the largest cloud providers will be best positioned as AI infrastructure matures. Amazon signs five-year or longer contracts with payback within two to three years, while Alphabet’s payback is around two years, and about half that when using its own TPUs. If demand slows, both can cut AI capex, generate large free cash flow, and pay down debt or buy back stock, and their custom chips may deliver better returns than providers relying on Nvidia GPUs. The article also cites Alphabet’s search leadership and Gemini features such as AI Overviews and AI Mode, and Amazon’s position as the largest e-commerce provider with strong robotics and AI-driven efficiencies.
- Amazon vs Alphabet: Which "Magnificent Seven" Stock Is the Better Buy Right Now?
The article compares Amazon (AMZN) and Alphabet (GOOGL, GOOG), two of the world's most valuable companies. Alphabet's valuation is around $4.1 trillion versus Amazon's $2.8 trillion, but Amazon's revenue over the past four quarters, $776 billion, is much larger than Alphabet's $446 billion. Alphabet generated $148 billion in operating profit at a 33% margin, while Amazon's operating margin averaged just 12% over the past 12 months. Amazon's forward P/E is nearly 24, above the S&P 500 average of 19, while Alphabet's is just under 22, and the author concludes Alphabet is the better buy.
- Waymo Will Be “a Trillion Dollar Business. Easy” per VC Investor
Bessemer Venture Partners' Sameer Dholakia says Waymo could become a trillion-dollar business by expanding from ride-hailing into personal car ownership, trucking and logistics. The article notes Bessemer invested in Waymo's $16 billion February round, which valued the company at $126 billion. Waymo reached 500,000 paid rides a week in March, but Sacra estimates its annualized revenue at only $355 million in February, under 0.1% of Alphabet's $403 billion in 2025 revenue. Alphabet trades at 25.0x forward earnings, within its usual range, while Uber trades at 18.2x, a level analyst Walter Piecyk links to the threat from Waymo and Tesla's Robotaxi.
- Prediction: Alphabet Will Be a Larger Company Than Apple by the End of 2027
The article predicts Alphabet could overtake Apple as the world's second-largest company by the end of 2027. Apple's market cap is just under $5 billion and Alphabet's is $4.2 billion. Apple spends little on data centers and large language models, planning to integrate Google Gemini into most of its products instead, and its AI features have been modest. The author says Apple has become a safe-haven option for investors wanting to hedge AI exposure, though it grows more slowly than Alphabet. On price-to-operating-earnings, Apple trades at a slight premium, and with Alphabet expected to grow faster, it could have higher operating income than Apple by then.
Related markets
Latest news
- Musk's wants to merge SpaceX and Tesla: Here's what to know
Musk said SpaceX and Tesla have formed special committees to study a merger, which would be worth about $3.5 trillion combined and would be the largest corporate deal in history. SpaceX, valued at about $2 trillion after a record listing this year, absorbed Musk's AI startup xAI in February, while Tesla is valued at about $1.5 trillion. Musk holds about 82 percent of SpaceX's voting power but only about 20 percent at Tesla. Dan Ives puts the odds of a deal at 90 percent by early 2027, though Musk called the requirement of a majority of all Tesla shares 'quite a high hurdle'. Loyal retail investors hold an estimated 25 to 27 percent of Tesla shares, and legal obstacles appear slight because both companies moved their incorporation to Texas from Delaware.
- CoreWeave and Nebius Stocks Are Crashing. Time to Buy the Dip?
Shares of Nebius and CoreWeave each fell 25% in the week of October 12 to 16. The sell-off stems from the yield on CoreWeave's debt in the secondary market surging to 15%, versus roughly 5% on Treasuries, which pushes the debt into 'distressed' territory and signals doubts about its ability to meet obligations. Nebius sold off in sympathy as a fellow neocloud company. The bigger concern is that both companies must keep issuing debt to fund data centers, and if yields are high at issuance, the assumption of nearly unlimited cheap capital could be challenged. The author says it is unclear whether now is the time to buy.
- Disney’s multiplatform Super Bowl plan frustrates ABC affiliates
ABC station owners are irritated that Disney is airing the Super Bowl across several platforms, including Disney+, ESPN2, NFL Network and ESPNU, even though the game is already on ABC and ESPN. A station group CEO estimates that the combined platforms could cut broadcast ad revenue by up to 35% compared with last year. Local affiliates typically earn about 3% of annual ad revenue from the Super Bowl and pay network owners reverse retransmission fees, but Disney+ lacks geofenced ad insertion, so affiliates cannot sell ads to streaming viewers. Disney says national commercials will be identical on all platforms and that streaming major live events is standard industry practice. Super Bowl LX drew 125.6 million viewers in February.
- Meta’s deal to keep Zuckerberg in California adds fuel to wealth tax debate ahead of election
Meta says Mark Zuckerberg will remain in California for eight years and has created a new stock plan that could help cover his taxes if Proposition 40, a 5% tax on Californians worth over $1 billion, passes on Election Day on Nov. 3. According to a filing released with its third-quarter earnings, Meta will issue non-voting Class C shares starting in January, and Zuckerberg can sell or transfer up to 20% of the shares granted to him without affecting his majority voting control. The filing says Zuckerberg’s leadership is crucial to the company’s growth and its AI ambitions, including Meta Superintelligence Labs. Most of the tech industry opposes the measure, while a recent Citrin-Politico poll found 46% in favor and 43% against, suggesting it may fall short of the majority support it needs.
- Nasdaq sell-off: A momentum unwind 'for the record books'
Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management, calls Thursday’s sell-off in the Nasdaq Composite (^IXIC) a momentum unwind “for the record books.” He says the market spent the first half of 2026 driven by a beta and momentum trade led by semiconductors, but in the third quarter, as rates rose, money shifted into quality stocks. He does not think the sell-off is justified by fundamentals, arguing that institutional portfolio managers swapping out of factor positions can drag down whole baskets of stocks. In semiconductors, spot rental rates for Nvidia Blackwell chips are higher than a month ago, showing tightening compute supply, even as financing costs rise and investors worry about neocloud business models and the rising cost of insuring their bonds.
- Dune launches real-time data feeds covering 200 onchain trading venues
Blockchain analytics platform Dune has launched real-time market data feeds covering more than 200 onchain trading venues, aiming to bring this data into the systems of traditional financial institutions. The feeds draw trade data from 12 blockchains, including Ethereum, Solana and Base, about one second after execution, covering both spot trading on decentralized exchanges and perpetual futures on Hyperliquid and Lighter. Early clients include quant funds, market makers, asset managers and bank trading desks, which use the data to assess liquidity and compare prices, though Dune did not name them. Meanwhile, the tokenized stock market has grown sharply, with distributed value reaching $3.58 billion, but 16 companies, including Microsoft, Alphabet and Goldman Sachs, have objected to their shares being traded on OKXICE’s proposed platform, and liquidity remains fragmented.
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.