Alphabet's Cloud Business Soars, AI Strategy Draws Attention
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 13 hours ago
0mins
Should l Buy GOOG?
Source: CNBC
- Cloud Business Growth: Google Cloud grew 63% year-over-year in Q1, outpacing Azure and AWS, with a backlog of $462 billion, half of which is expected to be recognized in the next 24 months, indicating strong market demand and client trust.
- Surge in AI Product Revenue: Revenue from generative AI products surged approximately 800% year-over-year, with CEO Sundar Pichai highlighting faster customer acquisition and deeper relationships with existing clients as key growth drivers, showcasing Google's competitive edge in AI.
- TPU Sales Outlook: Google plans to start delivering its custom AI chips to external customers in the second half of 2026, which could significantly enhance the company's profitability, although investors are still focused on details regarding sales models and margins.
- Relationship with Anthropic: Google's ties with AI startup Anthropic are under scrutiny, as the reported $200 billion cloud commitment could represent a major portion of Google's future cloud revenue, reflecting the company's strategic positioning in AI infrastructure.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy GOOG?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to fall
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 393.320
Low
255.00
Averages
336.08
High
400.00
Current: 393.320
Low
255.00
Averages
336.08
High
400.00
About GOOG
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.
Druckenmiller Sells Google, Boosts Memory Stocks
- Portfolio Shift: Stanley Druckenmiller sold all 385,000 shares of Alphabet during Q1, despite a 50% appreciation during his holding period, indicating a focus on short-term profits that may impact market confidence in Alphabet.
- Emerging Investment Focus: Concurrently, he increased positions in three hot storage stocks—Sandisk, Micron, and Seagate—reflecting optimism about the rapid expansion of AI data center infrastructure, which is expected to drive performance growth for these companies.
- Market Dynamics Analysis: Despite Sandisk and Micron's stock prices soaring 3,370% and 660% over the past year, their price-to-earnings ratios remain relatively cheap at 8 and 7, suggesting a continued optimistic outlook on their future growth potential in a historically pricey market.
- Industry Outlook: While Druckenmiller is cautious about AI stocks, his confidence in the storage sector remains strong, anticipating that the demand for high-capacity hard drives and memory will continue to rise, thereby enhancing the gross margins and competitive positioning of these companies.
See More
Druckenmiller Exits Alphabet, Increases Stakes in Storage Stocks
- Druckenmiller Sells Alphabet: In the first quarter, Stanley Druckenmiller completely exited his investment in Alphabet, selling 385,000 shares, which may reflect profit-taking after a 50% gain, but also indicates his short-term skepticism towards AI stocks.
- Increased Storage Investments: Concurrently, he significantly increased his stakes in the storage sector by acquiring 38,155 shares of Sandisk, 50,700 shares of Seagate, and 23,400 shares of Micron, demonstrating confidence in the rapid expansion of AI data center infrastructure while remaining cautious about AI itself.
- Attractive Valuations: Despite Sandisk and Micron's stock prices soaring 3,370% and 660% over the past year, their forward price-to-earnings ratios remain at just 8 and 7, indicating that these stocks are still appealing amidst a generally overpriced market, potentially attracting more investor interest.
- Surging Market Demand: The rapid expansion of AI data center infrastructure has led to skyrocketing demand for high-capacity hard drives, HBM, NAND flash, and DRAM, resulting in significant gross margin increases for these storage stocks, suggesting that Druckenmiller's investment strategy may yield substantial returns in the future.
See More
Trump Executes 94 Trades in 'Magnificent Seven' Stocks in Q1 2026
- High Trading Volume: Trump executed 94 trades in 'Magnificent Seven' stocks during Q1 2026, with transaction values ranging from $50 million to $70 million, indicating significant activity in the tech stock market despite concerns over conflicts of interest.
- Key Stock Movements: The trades revealed net purchases of Apple (AAPL) and Alphabet (GOOG), while Tesla (TSLA) was the only stock sold, reflecting a preference for tech stocks and a cautious stance towards Tesla.
- Transparency Issues: Managed by the Trump Organization, which claims no involvement in specific investment decisions, the disclosure noted 27 trades as 'unsolicited', raising questions about transparency and compliance with ethical standards.
- Significant Timing of Trades: On February 10, Trump purchased at least $1 million in Nvidia (NVDA) stock just before the company announced a strategic partnership with Meta, highlighting the close connection between his trading activities and market developments, potentially raising concerns about conflicts of interest.
See More
Klarna's Stock Plummets Post-IPO Amid Market Concerns
- Poor IPO Performance: Klarna's stock has plummeted 62% from its first-day closing price last September, indicating investor concerns about its future growth, although the current lower price may attract buyers.
- Strong User Growth: With over 119 million active consumers across 26 countries and processing 3.4 million transactions daily, Klarna maintains its leadership in the buy now, pay later market, despite risks associated with declining consumer spending.
- Improved Financials: In the first quarter, Klarna's revenue surged 44% year-over-year, with adjusted operating income rising from $3 million to $68 million, and net income flipping from a $99 million loss to a $1 million profit, showcasing significant progress in diversifying revenue streams.
- Market Share Gains: By forging new partnerships with JPMorgan and Worldpay, Klarna is capturing market share from competitors like Affirm and PayPal, further solidifying its position in the rapidly growing BNPL sector.
See More
Klarna Reports Strong Q1 Growth Amid Product Diversification
- Product Diversification: Klarna has successfully expanded its market reach by launching new products and partnering with JPMorgan Payments and Worldpay, with its Fair Financing product's GMV increasing by 138% year-over-year in Q1, indicating strong market demand and profit potential.
- Significant User Growth: With over 119 million active consumers across 26 countries and processing more than 3.4 million transactions daily, Klarna solidifies its leadership position in the buy now, pay later market, further enhancing its market share.
- Improved Profitability: Despite being unprofitable since its IPO, Klarna reported a net profit in Q1, reflecting the resilience of its business model, particularly as consumer spending faces pressure, showcasing the necessity and appeal of its products.
- Competitive Market Advantage: Klarna's price-to-sales ratio is lower than that of its competitors, especially compared to PayPal, enhancing its competitiveness in the buy now, pay later sector; although its stock is down 48% year-to-date, its diversification strategy lays a solid foundation for future growth.
See More
Berkshire Hathaway Increases Holdings in Seven Stocks
- Increased Google Holdings: Berkshire Hathaway boosted its stake in Alphabet's Class A shares by 204% in Q1, reflecting strong confidence in the tech giant's future growth potential and solidifying its importance in the investment portfolio.
- New Investment Highlight: Under CEO Abel's leadership, Berkshire initiated a purchase of 39.8 million shares of Delta Air Lines, valued at $2.6 billion, making it the largest new holding, indicating optimism about the airline industry's recovery.
- Digital Success of NYT: Berkshire significantly increased its stake in The New York Times Company in Q1, driven by a 24.9% year-over-year growth in digital advertising revenue reported in Q4 2025, showcasing the success of its digital transformation and enhancing the attractiveness of the investment.
- Diversified Investment Strategy: Berkshire also initiated a new position in Alphabet's Class C shares in Q1, demonstrating a long-term bullish outlook on the company's prospects in AI and cloud computing, despite its relatively high valuation, indicating substantial future growth potential.
See More
Druckenmiller Sells Google, Boosts Memory Stocks
- Portfolio Shift: Stanley Druckenmiller sold all 385,000 shares of Alphabet during Q1, despite a 50% appreciation during his holding period, indicating a focus on short-term profits that may impact market confidence in Alphabet.
- Emerging Investment Focus: Concurrently, he increased positions in three hot storage stocks—Sandisk, Micron, and Seagate—reflecting optimism about the rapid expansion of AI data center infrastructure, which is expected to drive performance growth for these companies.
- Market Dynamics Analysis: Despite Sandisk and Micron's stock prices soaring 3,370% and 660% over the past year, their price-to-earnings ratios remain relatively cheap at 8 and 7, suggesting a continued optimistic outlook on their future growth potential in a historically pricey market.
- Industry Outlook: While Druckenmiller is cautious about AI stocks, his confidence in the storage sector remains strong, anticipating that the demand for high-capacity hard drives and memory will continue to rise, thereby enhancing the gross margins and competitive positioning of these companies.
See More
Druckenmiller Exits Alphabet, Increases Stakes in Storage Stocks
- Druckenmiller Sells Alphabet: In the first quarter, Stanley Druckenmiller completely exited his investment in Alphabet, selling 385,000 shares, which may reflect profit-taking after a 50% gain, but also indicates his short-term skepticism towards AI stocks.
- Increased Storage Investments: Concurrently, he significantly increased his stakes in the storage sector by acquiring 38,155 shares of Sandisk, 50,700 shares of Seagate, and 23,400 shares of Micron, demonstrating confidence in the rapid expansion of AI data center infrastructure while remaining cautious about AI itself.
- Attractive Valuations: Despite Sandisk and Micron's stock prices soaring 3,370% and 660% over the past year, their forward price-to-earnings ratios remain at just 8 and 7, indicating that these stocks are still appealing amidst a generally overpriced market, potentially attracting more investor interest.
- Surging Market Demand: The rapid expansion of AI data center infrastructure has led to skyrocketing demand for high-capacity hard drives, HBM, NAND flash, and DRAM, resulting in significant gross margin increases for these storage stocks, suggesting that Druckenmiller's investment strategy may yield substantial returns in the future.
See More
Trump Executes 94 Trades in 'Magnificent Seven' Stocks in Q1 2026
- High Trading Volume: Trump executed 94 trades in 'Magnificent Seven' stocks during Q1 2026, with transaction values ranging from $50 million to $70 million, indicating significant activity in the tech stock market despite concerns over conflicts of interest.
- Key Stock Movements: The trades revealed net purchases of Apple (AAPL) and Alphabet (GOOG), while Tesla (TSLA) was the only stock sold, reflecting a preference for tech stocks and a cautious stance towards Tesla.
- Transparency Issues: Managed by the Trump Organization, which claims no involvement in specific investment decisions, the disclosure noted 27 trades as 'unsolicited', raising questions about transparency and compliance with ethical standards.
- Significant Timing of Trades: On February 10, Trump purchased at least $1 million in Nvidia (NVDA) stock just before the company announced a strategic partnership with Meta, highlighting the close connection between his trading activities and market developments, potentially raising concerns about conflicts of interest.
See More
Klarna's Stock Plummets Post-IPO Amid Market Concerns
- Poor IPO Performance: Klarna's stock has plummeted 62% from its first-day closing price last September, indicating investor concerns about its future growth, although the current lower price may attract buyers.
- Strong User Growth: With over 119 million active consumers across 26 countries and processing 3.4 million transactions daily, Klarna maintains its leadership in the buy now, pay later market, despite risks associated with declining consumer spending.
- Improved Financials: In the first quarter, Klarna's revenue surged 44% year-over-year, with adjusted operating income rising from $3 million to $68 million, and net income flipping from a $99 million loss to a $1 million profit, showcasing significant progress in diversifying revenue streams.
- Market Share Gains: By forging new partnerships with JPMorgan and Worldpay, Klarna is capturing market share from competitors like Affirm and PayPal, further solidifying its position in the rapidly growing BNPL sector.
See More
Klarna Reports Strong Q1 Growth Amid Product Diversification
- Product Diversification: Klarna has successfully expanded its market reach by launching new products and partnering with JPMorgan Payments and Worldpay, with its Fair Financing product's GMV increasing by 138% year-over-year in Q1, indicating strong market demand and profit potential.
- Significant User Growth: With over 119 million active consumers across 26 countries and processing more than 3.4 million transactions daily, Klarna solidifies its leadership position in the buy now, pay later market, further enhancing its market share.
- Improved Profitability: Despite being unprofitable since its IPO, Klarna reported a net profit in Q1, reflecting the resilience of its business model, particularly as consumer spending faces pressure, showcasing the necessity and appeal of its products.
- Competitive Market Advantage: Klarna's price-to-sales ratio is lower than that of its competitors, especially compared to PayPal, enhancing its competitiveness in the buy now, pay later sector; although its stock is down 48% year-to-date, its diversification strategy lays a solid foundation for future growth.
See More
Berkshire Hathaway Increases Holdings in Seven Stocks
- Increased Google Holdings: Berkshire Hathaway boosted its stake in Alphabet's Class A shares by 204% in Q1, reflecting strong confidence in the tech giant's future growth potential and solidifying its importance in the investment portfolio.
- New Investment Highlight: Under CEO Abel's leadership, Berkshire initiated a purchase of 39.8 million shares of Delta Air Lines, valued at $2.6 billion, making it the largest new holding, indicating optimism about the airline industry's recovery.
- Digital Success of NYT: Berkshire significantly increased its stake in The New York Times Company in Q1, driven by a 24.9% year-over-year growth in digital advertising revenue reported in Q4 2025, showcasing the success of its digital transformation and enhancing the attractiveness of the investment.
- Diversified Investment Strategy: Berkshire also initiated a new position in Alphabet's Class C shares in Q1, demonstrating a long-term bullish outlook on the company's prospects in AI and cloud computing, despite its relatively high valuation, indicating substantial future growth potential.
See More
