A bullish thesis on Alphabet Inc. (GOOGL) highlights its strong market position, trading at $157.04, with P/E ratios of 19.53 and 17.64. Alphabet leads in web search, YouTube, cloud services, Android, and autonomous driving, boasting over 90% margins. Despite AI and regulatory concerns, it’s projected to generate ~$180 billion in free cash flow by 2030, with an estimated 15% EPS growth in 2026. Current valuations suggest an intrinsic stock value between $225 and $250, appealing for long-term investors. GOOGL is popular among hedge funds, with 234 holdings, though some see greater potential in other AI stocks.
We discovered a bullish thesis regarding Alphabet Inc. (GOOGL) on Substack by LongTermValue Research. This article aims to summarize the bullish perspective on GOOGL. As of April 2nd, shares of Alphabet Inc. (GOOGL) were trading at $157.04. According to Yahoo Finance, GOOGL’s trailing and forward P/E ratios stood at 19.53 and 17.64, respectively.
Jim Cramer Expresses Concern About Alphabet (GOOG) Amid AI Threat – ‘I Stopped Going to Google’
A laptop and phone displayed, open to Google’s services in a typical setting. Alphabet continues to dominate in various sectors, including web search (Google), video streaming (YouTube), cloud computing (Google Cloud), mobile operating systems (Android), and autonomous driving (Waymo). Its near-monopoly in search yields exceptional margins exceeding 90%, reinforcing its leadership in several high-growth industries. Despite recent apprehensions regarding AI-driven search disruptions and regulatory challenges, the company is expected to generate approximately $180 billion in free cash flow by 2030, backed by an anticipated 15% EPS growth in 2026. Alphabet’s 2025 P/E stands at 18x, while the 2026 P/E is at 15.8x, with a PEG ratio of around 1.1x, indicating a fair valuation considering its long-term growth potential. The stock is currently trading 20% below both its 30-day and all-time highs, presenting an appealing entry point for investors who believe Alphabet can effectively handle the competitive challenges posed by AI search and regulatory obstacles. Historical SOTP valuations suggest the stock’s intrinsic value lies between $225 and $250 per share, indicating significant upside potential. While Alphabet’s valuation is not at a historical low—its 2-year forward P/E reached about 12.5x in 2022—it remains attractive for those who trust in its capacity to maintain its dominance in AI, cloud computing, and digital advertising over the long haul.
Alphabet Inc. (GOOGL) is included in our list of the 30 Most Popular Stocks Among Hedge Funds. According to our database, 234 hedge fund portfolios held GOOGL at the end of the fourth quarter, a rise from 202 in the previous quarter. While we recognize the risks and potential of GOOGL as an investment, we believe that certain AI stocks may offer better prospects for higher returns in a shorter time frame. If you are seeking an AI stock that appears more promising than GOOGL and trades at less than five times its earnings, be sure to check out our report on the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.