Alphabet Remains Mispriced: The Market Still Sees Risk Where There Is Reinforcement
Summary
- Alphabet's Q1 results crushed expectations, proving its AI integration strategy has enhanced, rather than threatened, its dominant Search business.
- Despite fears of disruption from ChatGPT and similar tools, Alphabet grew Search revenue by nearly 10%, maintaining ~90% market share.
- With EPS up 46% and net income at $34.5B, Alphabet has demonstrated elite execution and resilience in a shifting tech landscape.
- Valuation metrics now show Alphabet as cheaper than its sector peers, despite stronger growth, profitability, and massive $95B cash reserves.
- I now rate Alphabet a buy, as the market's AI-driven discount looks unjustified in light of the company’s strategic agility and financial strength.
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