Alphabet: Too Cheap Given The AI Potential

The Asian Investor
29.61K Followers

Summary

  • Alphabet Inc. delivered strong Q2 results on Wednesday, beating expectations on both earnings and revenue, driven by AI-powered growth in Cloud and Search businesses.
  • Free cash flow remains robust despite a temporary dip from aggressive AI-related CapEx, with long-term profitability expected to surge as investments pay off.
  • Cloud growth accelerated to 3.6 PP Q/Q for Google, and the segment's profitability is surging. CapEx plan up-size strongly suggests long-term FCF upside.
  • Google is significantly undervalued in the big tech group, trading at just 18.4X forward earnings, making it an attractive play on AI and Cloud growth.
  • With accelerating Cloud momentum, high capital returns, and strategic CapEx, I see GOOGL stock as a top-tier, long-term investment opportunity.

Artificial Intelligence Machine Learning Natural Language Processing Data Technology

Just_Super

Alphabet Inc., aka Google (NASDAQ:GOOG, GOOGL), beat consensus expectations for the second quarter in terms of its earnings and revenues. Alphabet up-sized its CapEx plan as well, by a material $10.0B compared to the previous guidance, and the

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29.61K Followers
I am interested in a lot of technology and AI stocks like Google, Nvidia, AMD, Tesla and Amazon.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of GOOG, AAPL, AMZN, 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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