Explore the latest developments concerning Alphabet Has More.
Alphabet Has More Growth Engines Than Investors Think, We See 63% Upside
GOOG carries a $559 price target and BUY rating as Google Cloud's margin surged from 21% to 36% on 82% growth with a $514B backlog.
GOOG trades at 22x forward earnings, cheaper than MSFT at 25x and growing faster, while META's 28% revenue growth came with a 13% earnings decline.
Quarterly capex doubled to $45B, pushing free cash flow negative and nearly doubling long-term debt to $98B with buybacks suspended.
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Alphabet (NASDAQ:GOOG) last closed at $341.08. The 24/7 Wall St. price target for Alphabet is $559 over the next 12 months. The stock offers 63.89% upside, and our model rates it a buy with high conviction.
What Is The One Risk Every Google Stock Investor Should Know?
Alphabet turns about 42 cents of every sales dollar into operating cash, yet only about 12 cents is left as free cash flow. That’s less than any of its big-tech peers except Amazon, and lower vs its own three-year average. The gap is capital spending, mostly on AI. Even so, Alphabet (GOOGL) stock returned 40% over the past twelve months, against 17.7% for the S&P 500. The price appears to assume that the spending will pay for itself. With Google Cloud growing fast, that looks reasonable. But management raised its spending plan in July. A holder’s gain now depends on whether that growing bill pays off. So what is the one risk every Alphabet investor should know?
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Alphabet: The AI Winner Nobody Is Talking About (NASDAQ:GOOGL)
Yesterday, I wrote about the Meta Platforms (META) AI agents thesis. It’s a great optionality; Meta has great distribution power (billions in DAUs). The potential is huge, not only through take rates and shopping agents but also through enterprise AI services.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOGL, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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