Alphabet: Being Optimistic When Others Are Pessimistic

Summary

  • Alphabet's search business remains resilient, with market share stabilizing and 10% YoY growth, despite overblown fears of AI-driven disruption.
  • AI Overviews and Gemini are driving user engagement and monetization, with Gemini 2.5 Pro leading in intelligence, speed, and cost-efficiency versus competitors.
  • Agentic AI presents a massive growth opportunity, with Alphabet well-positioned through its AI Cloud, Ironwood TPU, and enterprise-focused agent solutions.
  • Valuation is attractive at a P/E of 19.9; I reiterate my buy rating and $230 target, recommending increasing portfolio weight in GOOG/GOOGL.
Ai search tech concept, Person use laptop with AI search engine bar for data search optimization by artificial intelligence technology.

Bongkod Worakandecha

Overview:

Back in December 2024, I had posted a bullish article on Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), citing robust growth in the cloud business, overblown fears of AI chatbots impacting the search engine business, and a potential divestiture. While the business

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I am Shubhm Thakkar, an MBA student at the Indian Institute of Management—Indore. I cleared the CFA Level 1 examination that was held in May 2023 and the CFA Level 2 conducted in November 2024. IIM Indore consistently ranks in the Financial Times Top 100 Schools for MBA/ MiM.I have experience publishing on Seeking Alpha as part of my internship at Que Capital, which was a subsidiary of AlmaStreet Capital LLC—an entity that previously published on this platform. At AlmaStreet, I followed a GARP Approach - Growth At a Reasonable Price. I intend to use the GARP approach and a Value Investing approach to write my reports on Stocks and ETFs, varying depending on the industry that the stock is a part of and the stage of the business cycle.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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