GOOGL
Alphabet Inc.Thesis. Alphabet pairs a fortress Search/YouTube franchise (60% gross margin, 38% ROE) with a Cloud/AI infrastructure stack that owns its own TPU silicon — a structural cost edge as peers burn $140bn+ each on the data-center buildout. At 25x forward EPS with 22% revenue growth and 82% earnings growth, GOOGL trades at a growth-adjusted discount to megacap peers; we see 18% upside to consensus.
Scoreboard
GOOGL sits at $367.03, ~10.2% below its 52-week high of $408.61 and 112% above the $172.77 low, placing it in the 82nd percentile of its annual range. Market cap is $4.48tn against consensus mean target of $432.29 (17.8% upside). The stock trades just below its 50-day average of $372.08 but well above the 200-day of $317.32 — a consolidation within an intact primary uptrend.
QoQ Changes
Most recent print (Q ending 2026-03-31) posted revenue of $109.9bn, down ~3.5% QoQ from $113.8bn, but net income surged to $62.6bn (Basic EPS $5.17) versus $34.5bn prior — inflated by non-operating/investment gains. Operating income of $39.7bn (+10.5% QoQ) is the cleaner read on core momentum.
Gross margin held ~62% on the latest quarter while operating margin expanded to ~36.1% from 31.6% sequentially. EBITDA margin of 38.2% (trailing) reflects scale leverage as Cloud reaches profitability inflection.
Trailing FCF margin is a thin 6.6% and FCF yield just 0.62%, compressed by the capex supercycle — Alphabet is guided into the $140bn+ hyperscaler capex bracket for 2026. Operating cash generation remains robust but the buildout is eating free cash near-term.
Alphabet holds $126.8bn cash against $95.9bn debt, leaving $31.0bn net cash and $10.47 cash/share. Current ratio of 1.92 and quick ratio of 1.71 signal ample liquidity with debt/equity a modest 20%.
Shares trade at 25.2x forward EPS, 27.4x EV/EBITDA and 10.6x sales — a premium to the market but reasonable against 82% earnings growth (PEG 1.44). Multiples remain below Microsoft and roughly in line with the megacap AI cohort.
News flow highlights the $140bn+ AI capex commitment BofA flagged across hyperscalers, a UK CMA conduct ruling on Search rankings, and YouTube's bid for the $2bn FIFA World Cup US rights package. These reinforce both the AI infrastructure thesis and content-monetization optionality.
Ownership & Insider Activity
Finnhub Form 4 activity over the last window is exclusively code 'A' compensation grants (Porat, Walker, Hennessy — single- to double-digit share awards), with no open-market P purchases and net insider selling of just $293k — effectively immaterial. Institutions hold 80.6% with BlackRock (7.7%) and Vanguard (6.5%+1.7%) anchoring; short interest is negligible at 1.53% of float and a 2.79 short ratio. Sergey Brin's 437.5k-share activity and NYC real-estate exit are personal portfolio moves, not a corporate signal.
Recent Insider Transactions
| Date | Insider | Position | Shares | Value |
|---|---|---|---|---|
| 2026-02-19 | SERGEY BRIN | Director and Beneficial Owner of more than 10% of a Class of Security | 437,500 | $0.00 |
| 2026-02-13 | HENNESSY JOHN L | Director | 600 | $184.0K |
| 2026-01-13 | HENNESSY JOHN L | Director | 600 | $202.5K |
| 2025-12-09 | SHRIRAM KAVITARK RAM | Director | 39,200 | $0.00 |
| 2025-09-25 | SHRIRAM KAVITARK RAM | Director | 243,508 | $0.00 |
| 2025-08-15 | SHRIRAM KAVITARK RAM | Director | 26,000 | $5.3M |
Earnings Quality
| Period | Actual EPS | Estimate | Surprise | Surprise % |
|---|---|---|---|---|
| 2026-03-31 Q1 | $2.62 | $2.71 | $-0.09 | -3.15% |
| 2025-12-31 Q4 | $2.82 | $2.71 | +$0.11 | +4.20% |
| 2025-09-30 Q3 | $3.10 | $2.40 | +$0.70 | +29.41% |
| 2025-06-30 Q2 | $2.31 | $2.25 | +$0.06 | +2.67% |
Alphabet beat consensus in 3 of the last 4 quarters (75% beat rate) with an average surprise of +8.3%, headlined by a +29.4% blowout in Q3 2025 — evidence of both durable execution and repeated analyst under-modeling of Cloud/AI operating leverage.
The trajectory is normalizing: after the Q3 2025 +29% surge, surprises narrowed to +4.2% then flipped to a modest -3.1% miss in Q1 2026, suggesting the Street has recalibrated upward and the easy upside-surprise window is closing.
Analyst Action
| Month | Distribution | Strong Buy | Buy | Hold | Sell | Strong Sell |
|---|---|---|---|---|---|---|
| 2026-07 | 18 | 42 | 9 | 0 | 0 | |
| 2026-06 | 19 | 42 | 9 | 0 | 0 | |
| 2026-05 | 21 | 41 | 8 | 0 | 0 | |
| 2026-04 | 19 | 41 | 8 | 0 | 0 |
The rating book is stable-to-slightly-softening at the top: Strong Buy slipped from 21 (May) to 18 (Jul) while Buy held near 42 and Hold stayed at 9, with zero Sell/Strong Sell throughout. Consensus recommendation mean of 1.44 across 53 analysts remains firmly in 'Strong Buy' territory.
Momentum is neutral — no upgrades or downgrades in the trailing 15 days and marginal migration from Strong Buy to Buy, but the overwhelming skew stays constructive.
Seven Essential Metrics
EBITDA margin 38.2%, operating margin 36.1%, ROE 38.9% and ROA 14.6% — best-in-class capital efficiency.
Revenue growth 21.8% and earnings growth 82%, with quarterly EPS growth of 81.2%.
FCF margin compressed to 6.6% and FCF yield just 0.62% as the AI capex supercycle consumes free cash.
$31.0bn net cash, debt/equity 20% — a de-levered balance sheet funding capex internally.
Beta 1.25, negligible short interest (1.5%), and fortress liquidity offset regulatory and AI-spend overhang.
Forward P/E 25.2x, EV/EBITDA 27.4x, P/S 10.6x — premium but justified by growth (PEG 1.44).
Ongoing buyback cadence with immaterial insider dilution; share count discipline supports EPS.
Alphabet initiated a token dividend but remains a capital-return-via-buyback story; yield is negligible.
Competitive Snapshot
| Company | EBITDA Margin | 3Y Rev CAGR | FCF Margin | Leverage | Fwd P/E |
|---|---|---|---|---|---|
MSFT Microsoft Corp. | ~53% | ~15% | ~25% | Net cash | ~31x |
AMZN Amazon.com Inc. | ~20% | ~12% | ~6% | <1x | ~33x |
META Meta Platforms Inc. | ~50% | ~18% | ~25% | Net cash | ~24x |
NVDA NVIDIA Corp. | ~62% | ~60% | ~45% | Net cash | ~32x |
Against the hyperscaler cohort, Alphabet's 25.2x forward P/E is the cheapest ex-Meta despite the fastest earnings growth (82%). Its ownership of the TPU stack differentiates it from Microsoft/Amazon, who lease Nvidia silicon at margin — a structural cost edge as capex balloons past $140bn per player. GOOGL screens as the best growth-adjusted value in megacap AI infrastructure.
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Data source: Yahoo Finance / yfinance · fetched 7/8/2026, 6:00:04 AM