Technology
Parent of Google, dominating search and digital advertising while investing heavily in AI, cloud, and autonomous vehicles through Waymo.
View forensic reportAlphabet spent $91 billion on capex in 2025. Meta spent $70 billion. Both blamed AI infrastructure. One is showing clearer returns on the spend than the other, and the market has not fully separated them yet.
Even a 5% erosion of search query share to ChatGPT, Perplexity, and other generative-AI entrants would compress Alphabet's earnings by roughly 12%. The risk is in the multiple, not the headline growth.
The market is pricing in three bear case assumptions simultaneously. The data says at most one of them is right.
A 32% net income jump, $91B in capex, and still-expanding margins. This is not a mature company priced like one.
Search, Cloud, and YouTube each independently justify a higher price. The market is selling them as a bundle.
The $91 billion capex programme is suppressing free cash flow, but the operating machinery underneath has never been stronger.
At 25x earnings with $403 billion in revenue, Alphabet trades at a discount to every major tech peer. The reasons investors give for avoiding it do not hold up to scrutiny.
A 25x trailing P/E on $403 billion in revenue with $73 billion in free cash flow is not a growth multiple. It is a value stock wearing a tech badge.