Alphabet Emerges as a Leader in Artificial Intelligence
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 20 hours ago
0mins
Should l Buy GOOGL?
Source: NASDAQ.COM
- Capital Expenditure Plans: Alphabet plans to invest between $175 billion and $185 billion in capital expenditures by 2026, primarily for data center construction, which raises investor concerns about the return on investment; however, the company believes participating in the AI technology shift is crucial.
- Cloud Computing Growth: Google Cloud's revenue surged 48% year-over-year in Q4, making it the fastest-growing among major cloud competitors, indicating its increasing popularity for AI application development, particularly due to its custom chips that offer better cost performance.
- Market Performance: Despite Alphabet's market cap dropping from $4.2 trillion at the beginning of the year to $3.5 trillion now, equivalent to losing an ExxonMobil's worth, its stock is currently trading at valuation levels not seen in several months, presenting a potential buying opportunity.
- Investor Confidence: Although Alphabet's stock trades at a forward earnings multiple of 25, which is not considered
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 297.390
Low
305.00
Averages
374.25
High
400.00
Current: 297.390
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Cloud Giants Performance: Alphabet and Microsoft are reaping significant returns from their cloud computing investments, with Azure and Google Cloud revenues increasing by 39% and 48% year-over-year, respectively, despite both companies' stock prices dropping over 20%, indicating their sustained market leadership.
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- Strengthened AI Competitiveness: Despite challenges, Alphabet has successfully transitioned, solidifying Google Search as a primary interface for AI interaction, with its generative AI platform, Gemini, emerging as a leading model in a competitive landscape.
- Cloud Computing Growth: Google Cloud's revenue surged 48% year-over-year in Q4, making it the fastest-growing among major cloud competitors, driven by its custom chips that enhance cost performance for AI applications, attracting numerous developers.
- Capital Expenditure Concerns: Alphabet plans to allocate $175 billion to $185 billion for data center construction by 2026, raising investor concerns about ROI; however, the company argues that engaging in AI technology is essential, potentially yielding long-term benefits.
See More
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