Alphabet Class A (GOOGL) AI Stock Analysis

• Market Cap: $2.99T
• Dividend Yield: 0.33%
• Average Volume (3M): 35.00M
• Price to Earnings (P/E): 26.3
• Beta (1Y): 1.07
• Revenue Growth: 13.19%
• EPS Growth: 34.51%
• Country: US
• Employees: 185,719
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 2.31
• Shares Outstanding: 5,817,000,000
• 10 Day Avg. Volume: 35,005,553
• 30 Day Avg. Volume: 35,001,433
• 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: 0.70
• Enterprise Value/Revenue: 5.64
• Enterprise Value/Gross Profit: 9.58
• Enterprise Value/Ebitda: 13.29
• 1Y Price Target: $244.14
• Price Target Upside: -0.97% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 38

• Rating: 79 Outperform
• Price Target: $266.00 ▲(7.89% Upside)

Alphabet's overall stock score of 79 reflects its strong financial performance and growth prospects, particularly in AI and cloud services. The company's robust earnings call highlights significant achievements, although legal challenges and a high valuation pose risks. Technical indicators suggest bullish momentum, but caution is advised due to overbought signals.

Positive Factors

Revenue Growth

Strong revenue growth across key segments like Search, YouTube, and Cloud indicates robust business expansion and market demand.

AI and Cloud Innovation

Advancements in AI and cloud services position Alphabet for sustained growth, leveraging technology trends and increasing enterprise adoption.

Cash Generation

Strong cash generation supports strategic investments and provides financial flexibility, enhancing long-term business resilience.

Negative Factors

Legal Challenges

Significant fines and legal challenges can impact profitability and necessitate changes in business practices, affecting competitive dynamics.

Increased Operating Expenses

Rising operating expenses, including legal costs, may pressure margins and limit financial flexibility, impacting long-term profitability.

Supply Constraints in Cloud

Supply constraints in cloud services could hinder growth potential and limit the ability to meet increasing demand, affecting revenue.

Alphabet Class A Business Overview & Revenue Model

Company Description

Alphabet Class A (GOOGL) is the parent company of Google and several other subsidiaries, operating primarily in the technology sector. Founded in 1998, Alphabet focuses on internet services and products, including search engines, online advertising, cloud computing, software, and hardware. Its core products include Google Search, YouTube, Google Ads, Google Cloud, and the Android operating system, which together create a comprehensive ecosystem that connects users with information, services, and devices.

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: 246.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 246.54 is above the 20-day moving average (MA) of 240.90, above the 50-day MA of 215.25, and above the 200-day MA of 184.69, indicating a bullish trend. The MACD of 10.69 indicates Positive momentum. The RSI at 68.46 is Neutral, neither overbought nor oversold. The STOCH value of 40.63 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
META	87 Outperform	$1.87T	26.93	36.66%	0.28%	19.38%	40.62%
MSFT	83 Outperform	$3.80T	37.49	29.65%	0.65%	14.93%	15.50%
AAPL	80 Outperform	$3.79T	38.83	150.81%	0.40%	5.97%	0.15%
GOOGL	79 Outperform	$2.99T	26.26	34.83%	0.33%	13.19%	34.51%
BIDU	75 Outperform	$45.64B	12.06	9.01%	―	-1.32%	42.56%
AMZN	72 Outperform	$2.34T	33.54	21.16%	―	10.87%	56.13%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Alphabet Class A Corporate Events

Alphabet Fined €2.95 Billion by European Commission

On September 5, 2025, the European Commission announced that Google LLC, a subsidiary of Alphabet Inc., violated European competition laws through self-preferencing practices in its advertising technology business. The EC imposed a €2.95 billion fine on Google and directed the company to stop these practices, though Google plans to appeal the decision.

Alphabet Faces Antitrust Remedies Decision by Judge

On September 2, 2025, Judge Amit P. Mehta issued a remedies decision in the U.S. Department of Justice’s antitrust case against Google LLC, a subsidiary of Alphabet Inc., concerning online search practices. The decision, following an August 5, 2024 liability ruling, imposes restrictions on Google’s service distribution and mandates data sharing and syndication services with certain competitors, potentially impacting Google’s market operations and competitive dynamics.

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.