Alphabet Class C (GOOG) AI Stock Analysis

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Alphabet Class C

(NASDAQ:GOOG)

85Outperform

Alphabet Inc. exhibits strong financial performance and positive earnings call momentum, driven by robust growth in AI and cloud services. The company's technical analysis presents mixed signals, but its relatively low P/E ratio suggests potential undervaluation. Challenges such as network advertising declines and increasing depreciation expenses are noted but do not overshadow the overall positive growth outlook.

Positive Factors

AI and Technology

Google's unique full stack approach to AI continues to drive higher satisfaction and usage.

Earnings

Google delivered solid results with upside in advertising revenue and operating income.

Negative Factors

Market Competition

AI Search competition remains front and center given the rapidly growing scale of OpenAI’s ChatGPT and Google's more measured pace in disrupting its own search ecosystem.

Regulatory Challenges

Google lost parts of the AdTech anti-trust trial with the judge finding Google liable for monopolization of both the publisher ad server market and the ad exchange market.

Alphabet Class C (GOOG) vs. S&P 500 (SPY)

Market Cap

$1.93T

Dividend Yield0.49%

Average Volume (3M)25.69M

Price to Earnings (P/E)19.8

Beta (1Y)0.97

Revenue Growth13.02%

EPS Growth37.73%

CountryUS

Employees185,719

SectorCommunication Services

Sector Strength83

IndustryInternet Content & Information

Share Statistics

EPS (TTM)2.15

Shares Outstanding5,497,000,000

10 Day Avg. Volume32,645,006

30 Day Avg. Volume25,690,264

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)5.79

Price to Cash Flow (P/CF)13.00

P/FCF Ratio12.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$204.07

Price Target Upside24.55% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering17

Alphabet Class C Business Overview & Revenue Model

Company DescriptionAlphabet Inc., through its Class C shares (GOOG), operates as a global technology leader, primarily known for its search engine, Google. The company is headquartered in Mountain View, California, and functions through various segments including Google Services, Google Cloud, and Other Bets. Google Services encompasses core products such as Search, YouTube, Google Maps, Google Play, and the Android operating system. Google Cloud provides infrastructure and data analytics services, while Other Bets focuses on emerging businesses like Waymo, Verily, and more. Alphabet's mission is to organize the world's information and make it universally accessible and useful.

How the Company Makes MoneyAlphabet Inc. generates revenue primarily through advertising services, which constitute the majority of its total earnings. Advertising revenue comes from Google Search, YouTube ads, and partner sites in the Google Network through AdSense and AdMob. The company leverages its vast data analytics capabilities to provide targeted advertising, enhancing ad performance and user engagement. Additionally, Alphabet earns revenue from its Google Cloud segment by offering cloud computing services, including storage, data management, and machine learning capabilities. Other revenue streams include hardware sales, such as Pixel phones and Nest products, as well as digital content and apps sold on the Google Play Store. Strategic partnerships and investments in various sectors also contribute to Alphabet's financial success.

Alphabet Class C Financial Statement Overview

Summary

Alphabet demonstrates exceptional financial health characterized by strong revenue and profit growth, efficient leverage management, and robust cash flow generation. The company's financial stability and profitability make it well-positioned to capitalize on future opportunities and withstand potential market fluctuations.

Income Statement

Very Positive

Alphabet exhibits strong financial performance with substantial revenue growth of 13.82% in TTM (Trailing-Twelve-Months) over the previous year. The gross profit margin stands at 58.23%, and net profit margin is impressive at 28.62%. EBIT and EBITDA margins are also robust at 32.13% and 37.11% respectively, indicating high operational efficiency and profitability.

Balance Sheet

Very Positive

The balance sheet is healthy with a low debt-to-equity ratio of 0.07, suggesting minimal leverage risk. Return on equity is strong at 30.79%, reflecting efficient use of equity capital. The equity ratio is 72.20%, showing a solid equity base and financial stability.

Cash Flow

Very Positive

Cash flow analysis reveals a positive trajectory with a 4.70% growth in free cash flow. The operating cash flow to net income ratio is 1.25, indicating strong cash generation relative to earnings. Free cash flow to net income ratio is 0.73, suggesting effective cash utilization.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
359.71B	350.02B	307.39B	282.84B	257.64B	182.53B
	Gross Profit
210.76B	203.71B	174.06B	156.63B	146.70B	97.80B
	EBIT
117.52B	112.39B	84.29B	74.84B	78.71B	41.22B
	EBITDA
134.18B	135.39B	97.97B	91.33B	103.52B	61.91B
	Net Income Common Stockholders
111.00B	100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
95.33B	95.66B	110.92B	113.76B	139.65B	136.69B
	Total Assets
475.37B	450.26B	402.39B	365.26B	359.27B	319.62B
	Total Debt
22.56B	25.46B	27.12B	29.68B	26.21B	25.08B
	Net Debt
-700.00M	2.00B	3.07B	7.80B	5.26B	-1.39B
	Total Liabilities
130.11B	125.17B	119.01B	109.12B	107.63B	97.07B
	Stockholders Equity
345.27B	325.08B	283.38B	256.14B	251.63B	222.54B
Cash Flow		Free Cash Flow
74.88B	72.76B	69.50B	60.01B	67.01B	42.84B
	Operating Cash Flow
132.60B	125.30B	101.75B	91.50B	91.65B	65.12B
	Investing Cash Flow
-53.17B	-45.54B	-27.06B	-20.30B	-35.52B	-32.77B
	Financing Cash Flow
-80.22B	-79.73B	-72.09B	-69.76B	-61.36B	-24.41B

Alphabet Class C Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price163.85

Price Trends

50DMA

166.17

Negative

100DMA

179.02

Negative

200DMA

173.63

Negative

Market Momentum

MACD

-2.05

Negative

RSI

54.03

Neutral

STOCH

73.71

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOG, the sentiment is Neutral. The current price of 163.85 is above the 20-day moving average (MA) of 155.89, below the 50-day MA of 166.17, and below the 200-day MA of 173.63, indicating a neutral trend. The MACD of -2.05 indicates Negative momentum. The RSI at 54.03 is Neutral, neither overbought nor oversold. The STOCH value of 73.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GOOG.

Alphabet Class C Risk Analysis

Alphabet Class C disclosed 28 risk factors in its most recent earnings report. Alphabet Class C reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Alphabet Class C Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOG	85 Outperform	$1.93T	19.82	34.79%	0.49%	13.02%	37.73%
META	85 Outperform	$1.38T	22.35	37.14%	0.37%	21.94%	61.97%
GOOGL	82 Outperform	$1.98T	17.76	34.79%	0.49%	13.02%	37.73%
PINS	76 Outperform	$17.64B	9.64	47.49%	―	19.35%	―
SPOT	75 Outperform	$124.63B	101.59	28.91%	―	18.36%	―
BIDU	73 Outperform	$31.67B	9.90	9.14%	―	-2.60%	16.71%
Sector *	59 Neutral	$13.71B	6.83	-3.41%	3.82%	2.31%	-35.16%

* Communication Services Sector Average

Performance Comparison

GOOG

Alphabet Class C

163.85

-3.26

-1.95%

BIDU

Baidu

90.74

-15.43

-14.53%

Alphabet Class C Earnings Call Summary

Earnings Call Date: Apr 24, 2025 | % Change Since: 1.47% | Next Earnings Date: Jul 29, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant growth across Alphabet's business segments, particularly in AI and cloud initiatives, with strong revenue and user engagement metrics. While there are concerns about network advertising declines and increasing depreciation expenses, the positive momentum in key areas like YouTube, Google Cloud, and AI developments suggest an overall positive sentiment.

Highlights

Record-Breaking Revenue and Growth

Alphabet Inc. reported consolidated revenues of $90.2 billion, representing a 12% increase year-over-year, with a 14% increase in constant currency.

AI Initiatives Drive Growth

AI Overviews now has over 1.5 billion users per month, and Gemini 2.5 has been recognized as the best AI model in the industry. Active users in AI Studio and Gemini API have grown over 200% since the beginning of the year.

Strong Performance in Google Cloud

Google Cloud revenue increased by 28% to $12.3 billion, with an operating income increase to $2.2 billion and operating margin rising to 17.8%.

YouTube and Subscription Growth

YouTube Music and Premium reached over 125 million subscribers, and YouTube advertising revenues increased by 10% to $8.9 billion.

Waymo Expansion

Waymo is now serving over a quarter of a million paid passenger trips each week, a 5x increase from a year ago, with expansion plans in Atlanta and other cities.

Lowlights

Network Advertising Decline

Network advertising revenues declined by 2% to $7.3 billion.

Increasing Depreciation Expenses

Depreciation expenses increased by over $1 billion year-over-year, with expectations for further acceleration throughout 2025.

Challenges in Ad Revenue Growth

Potential headwinds in ad revenue growth due to changes in the de minimis exemption impacting APAC-based retailers.

Company Guidance

During the first quarter of 2025 earnings call, Alphabet Inc. provided several forward-looking metrics and insights into its business operations across various segments. The company reported consolidated revenues of $90.2 billion, marking a 12% year-over-year increase, with Google Services contributing $77.3 billion driven by a 10% increase in both Search and YouTube advertising revenues. Google Cloud revenue surged by 28% to $12.3 billion, reflecting strong demand for AI and core products. Subscription platforms and device revenues grew 19% to $10.4 billion, attributed largely to YouTube subscriptions and Google One. Operating income rose by 20% to $31 billion, with an operating margin increase to 33.9%, benefiting from revenue growth and cost management. The company highlighted the successful deployment of its Gemini 2.5 AI model, which has enhanced performance across its product lines, including Search, where AI Overviews now serves over 1.5 billion users monthly. Alphabet anticipates continued investments in AI and cloud infrastructure, with approximately $75 billion planned for 2025 CapEx, to support sustained growth and innovation.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.