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Yahoo
02-05-2025
- Business
- Yahoo
Alphabet Inc. (GOOG) stock price, news, quote and history
Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers AI infrastructure, Vertex AI platform, cybersecurity, data and analytics, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.
Yahoo
30-04-2025
- Business
- Yahoo
Alphabet Inc , at cycle lows. Tariffs or not, it remains a hot pick.
Has one of those rare moments begun when it becomes statistically advantageous to take a position in Alphabet (NASDAQ:GOOG) stock? Ill start from a fundamental assumption: the P/E ratio at 18.11x and the forward P/E at 16.18x have reached their lowest levels since 2010. Then moving on to a technical consideration: on the weekly timeframe, GOOG stock has touched 30 points on the 14-period RSI oscillator (an indicator at the core of my long-term investment plan). Setting aside the tariff narrative for a moment, with the postponement announced by Trump, Id say its worth assessing whether this is a value trap or one of those rare opportunities. Given the contraction of P/E ratios to average levels (mean reversion), with earnings still projected to grow in line with the sector, and Trump's tariff postponement (by 90 days), I believe theres room to start repositioning into high-growth potential companies like GOOG. Alphabet is the holding company of Google, operating in the Communication Services sector, specifically in the Internet Content & Information industry. According to the latest FactSet estimates, the sector is expected to grow by 7.2% in revenue and 12.2% in earnings, projections that closely mirror those for Google. I find it very helpful to start with a parallel to the broader sector, and an interesting insight emerges here. The S&P 500 Communication Services Index, where GOOG Class A and C shares collectively account for about 30%, has a P/E ratio of 20.40x, slightly higher than Googles (20.3x). Even from a technical perspective, on the weekly timeframe, the RSI of the sector approached the 30-point mark before the recent pullback. This parallel strengthens my view that GOOG shares may have reached an interesting bottom. To assess whether theres real alpha in Google and whether the recent pullbacks are a buying opportunity or not, I start by analyzing the business model, specifically to understand if the market, beyond pricing in tariff-related fears, may have also priced in fundamental deterioration. So how does Alphabet make money? According to the 2024 10-K report, the main revenue source is Google Services, which generated $304.93 billion, accounting for roughly 87% of total revenue. The second-largest segment is Google Cloud ($43.23 billion), around 12% of Alphabets revenue. Already from this overview, a key insight emerges: Alphabets outlook will depend heavily on Google Services, which essentially means advertising (Search, YouTube, Network), subscriptions (YouTube Premium, Google One), platforms (Play Store), and hardware (Pixel). One crucial note from the revenue breakdown: about 87% of Google Services revenue in 2024 came from Search, which means advertising, this definitely warrants a deeper look. The overwhelming share of revenue coming from advertising leads me to categorize Google more as a global advertising powerhouse than a cloud services provider, at least for now (though I believe Google Cloud will play an increasingly central role in future earnings). So whats Googles market share? The global digital advertising market size was valued at around $740 billion in 2024 Statista. With an annual ad income of $264.59 billion for Google alone, we are looking at a rough, 35% ad market share, clearly a dominating position. But dominance isnt everything. While Googles ad revenue grew by 10.5% in 2024, Metas ad segment grew by 21%. This is a relevant signal, suggesting a possible shift in advertising dollars, as Meta becomes a stronger player. Metas ad revenue totaled $160.63 billion, giving it a 21.7% market share. So yes, Google is still bigger, but its losing ground. This leads to a key question: If advertisers continue shifting toward other platforms (and since there are no long-term contractual obligations tying them to Google), does Google have the financial flexibility to reinvest and reclaim attention? Thats what I aim to explore in the next section, through the balance sheet. We have seen the past data (2024), now that the first results of Q1 2025 are approaching, it makes sense to look to the future. For 2025, Alphabet expects a revenue increase of 13.87%, above the 3-year revenue CAGR of 10.75%, revenues that would generate expected earnings growth of 11.23%, a steady trend confirmed by consensus for years, which as an analyst I tend to trust since Google's results are often known for being very in line with expectations, with negative surprises averaging only around 1%. It has an operating margin of 28%, which, given its size, makes it in my view a nearly unique company. It also naturally passes my debt screening criteria: with a debt-to-equity ratio of 8.66% and a current ratio of 1.84. But lets look at the house (cash flow), which in a context of potential change in advertising market habits, could actually be a very important cushion to rely on to remain competitive. From the cash flow statement, a positive and growing FCF is noted, higher than net income, so an FCF margin >10%, which in my view (according to my screening parameters) makes Alphabet a decidedly resilient company to possible sector changes (or rather, not yet at risk from that point of view). I see this as a true strength of Googles MOAT, its ability to remain highly flexible amid market changes. There don't seem to be any immediate reasons to fear cyclical changes, and tariff concerns have been postponed by three months, so what should be the fair value of GOOG shares? As simplistic as it may seem, I increasingly prefer working with multiples rather than discounted cash flows. I believe they offer greater flexibility, even if potentially less standardized. At $155 per share, Alphabet's trailing P/E ratio of 20.3x is calculated off of a TTM EPS of $7.70. Applying the forward EPS estimate of $8.97, the forward P/E declines to 17.94x, which is close to historical lows (17.2x) and significantly lower than the five-year average (24x), which I believe to be more appropriate to compare when valuing growth stocks like Alphabet, using this time frame makes sense when we are now in the context of the expansion of AI. Relative to its communication services-sector peers (five-year average P/E of 20.92x), Alphabet is trading at a level that is slightly cheaper. So I see three possibilities: Conservative: P/E = 18x. Target price = $8.97 18 = $161.46 Moderate: P/E = 20.92x (average for the sector). Target price = $187.64 Guidance: 24x P/E (Five-year Average Alphabet). Target price = $215.28 I find GOOG shares interesting from a technical perspective as well. I frequently use the 14-period RSI on a weekly timeframe to guide my decisions, and I see strong statistical significance in this indicator. Historically, when the RSI reaches the 30-point level on such broad timeframes, it has often marked excellent long-term entry points. Similarly, the price is approaching the 200-period moving average, and this narrowing gap makes the stock increasingly attractive from a technical standpoint based on historical patterns. I tend to associate risk with the method I used to value the stock, in this case, multiples. So I ask myself: what kind of EPS decline would be needed to trigger a significant further drop in Googles share price? I tend to exclude a drastic loss in advertising market share for the reasons already outlined. At this point, I believe the main risk could be geopolitical, namely, tariffs. Its a risk that is more psychological at first, and only later becomes fundamental. This variable (despite the recent 90-day reprieve) would likely precipitate a sharp drop in Googles stock if it were tied to a dramatic economic contraction (as predicted by the Atlanta Fed). User loyalty is based on convenience, not on binding contracts with Google. It may sound minor, but it actually makes a big difference. In that scenario, we would see less corporate advertising spending, which would hurt Googles bottom line. Its worth mentioning though, that the worst negative earnings surprise Google has produced in the past ten years occurred in 2022, at -3%. This would lower Googles earnings but wouldnt undo the positive aggregate growth trend. So I believe that, considering the concrete risks listed, markets may be overestimating the negative impact on Google. Based on the current EPS, which has remained stable in consensus estimates despite the recent negative sentiment, all target prices have turned positive, even in the most conservative scenario. Of course, the risk of a renewed escalation in tariffs is real and should be taken into account in any analysis. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
12-04-2025
- Business
- Yahoo
Is Alphabet Inc. (NASDAQ:GOOGL) a NASDAQ Stock with the Highest Upside Potential?
We recently published a list of the 13 NASDAQ Stocks with the Highest Upside Potential. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other NASDAQ stocks with high upside potential. On April 7, Dan Ives of Wedbush Securities joined CNBC's 'Squawk on the Street' to discuss how the current tariff environment could impact tech supply chains. Musk's actions and Trump's tariffs have contributed to broad economic uncertainty, which Ives also referred to as the economic Armageddon for US tech in an earlier conversation. He expressed concern about the structural supply chain challenges posed by recent tariffs and geopolitical tensions. Ives highlighted that the US tech sector has historically maintained an edge over China but this could be wiped out if manufacturing were relocated to the US. The logistical hurdles of building manufacturing plants in the US are not negligible and it would take 4 to 5 years to establish facilities capable of sustaining production levels comparable to those in Asia. He also acknowledged that he hasn't downgraded major stocks like the ones in MAG7 but remains cautious. If these previously highlighted issues persist for months, Ives anticipates drastic cuts in earnings. This uncertainty surrounding tariffs could lead to lower demand for emerging technologies like AI and cybersecurity. He explained that this situation could severely impact the US tech companies and lead to broader cuts across the tech sector — potentially up to 25% in earnings. He also criticized Elon Musk's political involvement, which he believes has caused permanent damage to his brand and customer base. He estimated a 20% demand destruction in Europe and 10% in the US. We used the Finviz stock screener to select the 13 stocks with the highest analysts' upside potential (at least 35%) as of April 8. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey's database. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A user's hands typing a search query into a Google Search box, emphasizing the company's search capabilities. Average Upside Potential as of April 8: 49.91% Number of Hedge Fund Holders: 234 Alphabet Inc. (NASDAQ:GOOGL) operates through Google Services, Google Cloud, and Other Bets segments. Google Services offers products and services like ads, Chrome, Google Drive, and Google Maps. Google Cloud offers AI infrastructure, Vertex AI platform, cybersecurity, and data & analytics for enterprise customers. The Other Bets segment sells healthcare-related and internet services. Ken Gawrelski of Wells Fargo maintained an Equal Weight rating on the company on March 31 while reducing the price target from $184 to $167 due to caution surrounding the market because of the current macroeconomic environment. The analyst also believes that Google's search business could potentially be disrupted by emerging technologies, like AI. However, the company now processes over 5 trillion annual searches, up from 2 trillion in 2016. Such improvements are fueled by AI features like Circle to Search and AI Overviews. Circle to Search lets you search for anything on your screen by circling or scribbling on it. AI overviews are AI-generated summaries that appear at the top of Google search results and provide quick answers to queries. Alphabet Inc. (NASDAQ:GOOGL) is also testing Gemini 2.0 in search results and focusing on voice, camera, and visual search to integrate advanced AI in its offering. Due to its growth in Search and Cloud, and the company's AI potential, Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter: 'Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company's stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they're seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.' Overall, GOOGL ranks 7th on our list of NASDAQ stocks with the highest upside potential. While we acknowledge the growth potential of GOOGL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
10-04-2025
- Business
- Yahoo
Google to Spend $75 Billion on AI Infrastructure Despite Tariff Tensions
Alphabet (NASDAQ:GOOG) is moving ahead with its plan to invest $75 billion in data center infrastructure, even as U.S. tariff policy shifts create uncertainty for hardware imports. Speaking at the Google Cloud Next Conference 2025 on Wednesday, CEO Sundar Pichai said the company's 2025 capital expenditure will focus on expanding its data centers and server capacity to support artificial intelligence compute needs and its cloud business. This will support our customers across the board, he noted. Pichai also introduced Google's Cloud Wide Area Network, or Cloud WAN, which will soon be available to global enterprise customers. He said the system leverages Google's global network, offering up to 40% faster application performance while cutting ownership costs by as much as 40%. The move follows a fourth-quarter 2024 capex outlay of $14 billion, mainly allocated to infrastructure, including servers and data centers supporting Google Services, Cloud, and DeepMind. Alphabet's CFO Anat Ashkenazi shared those figures in February. Despite rising hardware costs due to trade policy, Alphabet joins Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and Microsoft (NASDAQ:MSFT) in continuing large-scale infrastructure investments through 2025. Google Cloud executive Sachin Gupta told Reuters that while tariffs could raise input costs, customer demand still supports the expansion. On the same day, President Trump announced a temporary easing of tariffs on dozens of countries, while tightening trade measures targeting China. This article first appeared on GuruFocus.
Yahoo
10-04-2025
- Business
- Yahoo
Google to Spend $75 Billion on AI Infrastructure Despite Tariff Tensions
Alphabet (NASDAQ:GOOG) is moving ahead with its plan to invest $75 billion in data center infrastructure, even as U.S. tariff policy shifts create uncertainty for hardware imports. Speaking at the Google Cloud Next Conference 2025 on Wednesday, CEO Sundar Pichai said the company's 2025 capital expenditure will focus on expanding its data centers and server capacity to support artificial intelligence compute needs and its cloud business. This will support our customers across the board, he noted. Pichai also introduced Google's Cloud Wide Area Network, or Cloud WAN, which will soon be available to global enterprise customers. He said the system leverages Google's global network, offering up to 40% faster application performance while cutting ownership costs by as much as 40%. The move follows a fourth-quarter 2024 capex outlay of $14 billion, mainly allocated to infrastructure, including servers and data centers supporting Google Services, Cloud, and DeepMind. Alphabet's CFO Anat Ashkenazi shared those figures in February. Despite rising hardware costs due to trade policy, Alphabet joins Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and Microsoft (NASDAQ:MSFT) in continuing large-scale infrastructure investments through 2025. Google Cloud executive Sachin Gupta told Reuters that while tariffs could raise input costs, customer demand still supports the expansion. On the same day, President Trump announced a temporary easing of tariffs on dozens of countries, while tightening trade measures targeting China. This article first appeared on GuruFocus. Sign in to access your portfolio
