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Price of record
$279.84
Oct 30
Base value
$209.60
Bear $84.90 · Bull $346.21
Price vs base
+33.5%
Stance
Own below$167.68
Score
6.5
Market cap
$3.44T
P/FCF
47.0x
EV/Sales
8.3x
FCF margin
18.2%
ROIC, 5 yr avg
40.2%
$279.84

Closing price on October 30, 2026, recorded by an editor

Our base value
$209.60 33.5% above

Where the price sits on our values

Bear value
$84.90
Base value
$209.60
Bull value
$346.21
Price of record
$279.84
33.5% above base

Recorded closes against our base value then

Closed onClosePrice vs base
2026-10-30$279.84–

Prices are closes we record when we publish a view and when we check on a company. An owner reads the price against the value, not by the minute.

Company statistics

From the 10-Ks, computed in code · point at a figure for its formula

Our view

Stance
Own below$167.68
Base value
$209.60
Bear / bull
$84.90 / $346.21
Price vs base
+33.5%
Implied growth
16.7%
Score
6.5 / 10

Profile · FY2025

Market cap
$3.44T
Enterprise value
$3.36T
Diluted shares
12.23B
Revenue
$402.8B
Free cash flow
$73.3B
Owner earnings
$48.3B

Valuation · FY2025

P/E
26.0x
P/FCF
47.0x
P/Owner earnings
71.2x
EV/Sales
8.3x
EV/FCF
45.9x
P/B
8.3x

Margins · FY2025

Gross
–
Operating
32.0%
Net
32.8%
Free cash flow
18.2%
Owner earnings
12.0%
Stock pay
6.2%

Returns

ROIC, FY2025
31.9%
ROIC, 5 yr avg
40.2%
ROE, FY2025
31.8%
ROE, 5 yr avg
28.5%

Growth (CAGR)

Revenue, 3 yr
12.5%
Revenue, 5 yr
17.2%
Revenue, 9 yr
18.1%
Diluted EPS, 3 yr
33.3%
Diluted EPS, 5 yr
29.8%
Diluted EPS, 9 yr
25.6%
Free cash flow, 3 yr
6.9%
Free cash flow, 5 yr
11.3%
Free cash flow, 9 yr
12.3%

Financial health · FY2025

Cash and investments
$126.8B
Total debt
$48.5B
Net cash
$78.3B
Debt/Equity
0.1x
Debt/FCF
0.7x

Shareholder returns · FY2025

Dividend yield
0.3%
Payout ratio
7.6%
Buyback yield
1.3%
Shareholder yield
1.6%
Share count, 5 yr
–

Valuation

Computed from the latest 10-K
Bear value
$84.90
Base value
$209.60
Bull value
$346.21
Price
$279.84
33.5% above base

At $279.84 the price implies revenue growth of 16.7% a year for 5 years, with the base case's other assumptions.

AssumptionBearBaseBull
Revenue growth a year4.0%10.0%14.0%
Free cash flow margin, final year20.0%26.0%30.0%
Share count change a year-1.0%-1.5%-2.0%
Exit multiple of free cash flow15.0x22.0x26.0x
Discount rate10.0%10.0%10.0%
Years555
Value per share today$84.90$209.60$346.21
How these values are computed

Starting from FY2025: revenue $402.8B, 12.23B diluted shares, net cash $78.3B. Final-year free cash flow at the exit multiple, per final share, discounted to today, plus today's net cash per share.

  • Bear: AI answers take a third of search's commercial queries without matching ad economics.
  • Base: Search holds as AI becomes part of it; Cloud compounds; capex normalises.
  • Bull: AI deepens the moat: Gemini and TPUs win on cost, search monetises answers.

Scorecard

6.5
Scorecard: GOOGL510Technology edge9/10Switching costs6/10Growth runway7/10Profitability8/10Capital allocation7/10Valuation2/10
GOOGL6.5Pick an axis to read the reasons.

Compare with

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Ratings

Five axes judged with a reason; valuation computed from base value and price
Rating
Technology edge9 · Exceptional

Search, TPUs, Gemini and planet-scale infrastructure: one of very few companies building every layer of AI itself.

Switching costs6 · Average

Advertisers follow the users, and users can switch to an AI assistant in a click; Cloud and Workspace are stickier.

Growth runway7 · Strong

15% growth on $400B is strong; the question is what AI does to search's share of attention.

Profitability8 · Strong

32% operating margin, but free cash flow has stalled near $73B while capex absorbs the earnings growth.

Capital allocation7 · Strong

Buybacks shrink the share count 2 to 3% a year; stock pay is heavy and the moonshots are costly.

Valuation2 · Poor

$279.84 is 34% above our base value of $209.60.

Research

View 1 · November 1, 2026

The business

Alphabet earns most of its money from Google Search ads: advertisers bid in auctions to appear next to queries, and Google collects when users click. YouTube adds video ads and subscriptions; the ad network places ads on other sites. Google Cloud sells infrastructure, data tools and AI models to businesses, and is now profitable. Alphabet also designs its own AI chips (TPUs) and models (Gemini, from Google DeepMind).

Revenue in FY2025 was $402.8B, up 15.1%, with operating margin of 32%.

Moat and switching costs

Search's moat is scale on both sides: the most queries produce the best ads auction and the best data to improve results, and default placement (in Chrome, Android and on Apple devices) keeps the queries coming. AI chat assistants attack the first part: a user who gets an answer instead of a list of links may never see an ad.

The less visible moat is cost. Owning the chips, the data centres and the models means Alphabet can serve AI answers more cheaply than most rivals, which matters when AI answers become the product.

How the technology shows up in the numbers

The business converts most revenue into profit, but it is now capital hungry. Free cash flow was $73.3B in FY2025, roughly flat for three years while net income rose from $73.8B to $132.2B: the difference is data-centre and chip spending for AI.

Stock-based compensation is large ($25.0B in FY2025), so owner earnings (free cash flow minus stock pay) were $48.3B. Buybacks more than offset the dilution: diluted shares fell 1.7% in FY2025 and 3.3% in FY2023.

Thesis

Alphabet is priced as if search's best years are behind it. If AI answers are monetised at close to the economics of today's search ads, and Cloud keeps compounding on its own chips, earnings keep growing double digits and the capex cycle pays back.

We would own it below our stated price; the margin of safety is for the scenario where search shrinks.

Risks

  • AI answers cannibalising search ads faster than new ad formats replace them.
  • Antitrust remedies in the US search case and EU rulings that weaken default placement or the ad-tech business.
  • Capex that grows faster than the revenue it supports.
  • Other Bets and moonshots consuming cash without a path to returns.

What would change our mind

  • Paid clicks or search revenue declining for several consecutive quarters.
  • Losing default search placement on a major platform.
  • Cloud operating margin falling back toward zero.

Updates

0 since the first view

No updates since the view was published.

Financials: ten years from the 10-Ks

Reported numbers open their filing · computed ones show the formula · ˢ split-adjusted

Revenue

$402.8B

+18.1% a year over 9 years

FY2016: Revenue $90.3BFY2017: Revenue $110.9BFY2018: Revenue $136.8BFY2019: Revenue $161.9BFY2020: Revenue $182.5BFY2021: Revenue $257.6BFY2022: Revenue $282.8BFY2023: Revenue $307.4BFY2024: Revenue $350.0BFY2025: Revenue $402.8B
FY2016FY2025

Margins

Operating32.0%Net32.8%

FY2025

FY2016: Operating 26.3%, Net 21.6%FY2017: Operating 23.6%, Net 11.4%FY2018: Operating 20.1%, Net 22.5%FY2019: Operating 21.1%, Net 21.2%FY2020: Operating 22.6%, Net 22.1%FY2021: Operating 30.6%, Net 29.5%FY2022: Operating 26.5%, Net 21.2%FY2023: Operating 27.4%, Net 24.0%FY2024: Operating 32.1%, Net 28.6%FY2025: Operating 32.0%, Net 32.8%
FY2016FY2025

Free cash flow and owner earnings

Free cash flow$73.3BOwner earnings$48.3B

Free cash flow +12.3% a year

FY2016: Free cash flow $25.8B, Owner earnings $19.1BFY2017: Free cash flow $23.9B, Owner earnings $16.2BFY2018: Free cash flow $22.8B, Owner earnings $13.5BFY2019: Free cash flow $31.0B, Owner earnings $20.2BFY2020: Free cash flow $42.8B, Owner earnings $29.9BFY2021: Free cash flow $67.0B, Owner earnings $51.6BFY2022: Free cash flow $60.0B, Owner earnings $40.6BFY2023: Free cash flow $69.5B, Owner earnings $47.0BFY2024: Free cash flow $72.8B, Owner earnings $50.0BFY2025: Free cash flow $73.3B, Owner earnings $48.3B
FY2016FY2025

Diluted shares

12.23B

-7.1% over 9 years, net buybacks

FY2016: Diluted shares –FY2017: Diluted shares –FY2018: Diluted shares –FY2019: Diluted shares –FY2020: Diluted shares –FY2021: Diluted shares –FY2022: Diluted shares 13.16BFY2023: Diluted shares 12.72BFY2024: Diluted shares 12.45BFY2025: Diluted shares 12.23B
FY2016FY2025

Return on invested capital

31.9%

FY2025

FY2016: ROIC 14.7%FY2017: ROIC 22.3%FY2018: ROIC 33.5%FY2019: ROIC 34.6%FY2020: ROIC 34.1%FY2021: ROIC 51.8%FY2022: ROIC 39.9%FY2023: ROIC 39.2%FY2024: ROIC 38.6%FY2025: ROIC 31.9%
FY2016FY2025

Net cash

$78.3B

$78.3B more cash than debt

FY2016: Net cash $9.0BFY2017: Net cash $97.9BFY2018: Net cash $105.2BFY2019: Net cash $115.7BFY2020: Net cash $121.4BFY2021: Net cash $124.2BFY2022: Net cash $98.5BFY2023: Net cash $98.0BFY2024: Net cash $81.5BFY2025: Net cash $78.3B
FY2016FY2025

Every figure, year by year

Fiscal yearFY2016FY2017FY2018FY2019FY2020FY2021FY2022FY2023FY2024FY2025
The business
Revenue$90.3B$110.9B$136.8B$161.9B$182.5B$257.6B$282.8B$307.4B$350.0B$402.8B
Revenue growth20.4%22.8%23.4%18.3%12.8%41.2%9.8%8.7%13.9%15.1%
Gross margin––––––––––
Operating margin26.3%23.6%20.1%21.1%22.6%30.6%26.5%27.4%32.1%32.0%
Net income$19.5B$12.7B$30.7B$34.3B$40.3B$76.0B$60.0B$73.8B$100.1B$132.2B
Net margin21.6%11.4%22.5%21.2%22.1%29.5%21.2%24.0%28.6%32.8%
Diluted EPS$1.39s$0.90s$2.19s$2.46s$2.93$5.61$4.56$5.80$8.04$10.81
Return on invested capital?14.7%22.3%33.5%34.6%34.1%51.8%39.9%39.2%38.6%31.9%
Cash
Operating cash flow$36.0B$37.1B$48.0B$54.5B$65.1B$91.7B$91.5B$101.7B$125.3B$164.7B
Capital expenditure$10.2B$13.2B$25.1B$23.5B$22.3B$24.6B$31.5B$32.3B$52.5B$91.4B
Free cash flow$25.8B$23.9B$22.8B$31.0B$42.8B$67.0B$60.0B$69.5B$72.8B$73.3B
Stock-based compensation$6.7B$7.7B$9.4B$10.8B$13.0B$15.4B$19.4B$22.5B$22.8B$25.0B
Owner earnings?$19.1B$16.2B$13.5B$20.2B$29.9B$51.6B$40.6B$47.0B$50.0B$48.3B
Free cash flow per share––––––$4.56$5.46$5.85$5.99
Capital allocation
Dividends paid$0$0––––$0$0$7.4B$10.0B
Share repurchases$3.7B$4.8B$9.1B$18.4B$31.1B$50.3B$59.3B$61.5B$62.2B$45.7B
Diluted shares––––––13.16B12.72B12.45B12.23B
Share count change?–––––––-3.3%-2.2%-1.7%
Balance sheet
Cash and equivalents$12.9B$10.7B$16.7B$18.5B$26.5B$20.9B$21.9B$24.0B$23.5B$30.7B
Short-term investments–$91.2B$92.4B$101.2B$110.2B$118.7B$91.9B$86.9B$72.2B$96.1B
Total debt$3.9B$3.9B$4.0B$4.0B$15.3B$15.4B$15.3B$12.9B$14.2B$48.5B
Net debt-$9.0B-$97.9B-$105.2B-$115.7B-$121.4B-$124.2B-$98.5B-$98.0B-$81.5B-$78.3B
Shareholders' equity$139.0B$152.5B$177.6B$201.4B$222.5B$251.6B$256.1B$283.4B$325.1B$415.3B

History of our views

Every view stays as published; revisions say why
ViewPublishedStancePrice then
View 12026-11-01Own below$167.68–

Latest filings

All on EDGAR
2026-10-2910-QQuarterly report
2026-10-288-KEarnings release
2026-07-2310-QQuarterly report
2026-07-228-KEarnings release
2026-04-3010-QQuarterly report
2026-04-298-KEarnings release
2026-04-24DEF 14AProxy statement
2026-02-0510-KAnnual report
2026-02-048-KEarnings release
2025-10-3010-QQuarterly report

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