A Deep Dive Analysis into GOOGL's Current Valuation
Alphabet is a holding company that wholly owns internet giant Google. The California-based company derives slightly less than 90% of its revenue from Google services, the vast majority of which is advertising sales. Alongside online ads, Google services houses sales stemming from Google's subscription services (YouTube TV, YouTube Music among others), platforms (sales and in-app purchases on Play Store), and devices (Chromebooks, Pixel smartphones, and smart home products such as Chromecast). Google's cloud computing platform, or GCP, accounts for roughly 10% of Alphabet's revenue with the firm's investments in up-and-coming technologies such as self-driving cars (Waymo), health (Verily), and internet access (Google Fiber) making up the rest.
GOOGL's stock price is driven by both fundamental growth factors and compelling market narratives that shape investor sentiment.
Google is leveraging its AI leadership through Gemini and PaLM models, cloud infrastructure, and integration across core products, while accelerating enterprise AI adoption through Google Cloud's AI solutions.
Google Cloud has reached sustained profitability while maintaining high growth, driven by enterprise AI adoption, infrastructure demand, and market share gains against AWS/Azure.
Google's core search business is evolving through AI integration (SGE) while maintaining its dominant market position, potentially expanding monetization through new AI-powered ad formats and user experiences.
$174.67
As of 6/13/2025
$2136.8B
Enterprise Value
$353.1B
Based on Q3 2024
At GOOGL's current market cap of $2136.8B, the market appears to be pricing in conservative growth assumptions. Let's examine these expectations using a discounted cash flow (DCF) analysis to determine fundamental value.
Conservative Valuation: The market is only pricing in 13% growth, below GOOGL's current 15.0% growth rate.
This suggests investors may be skeptical about GOOGL's ability to maintain its current growth rate, or the stock could be undervalued if current performance persists.
$2326.1B
Based on your growth and margin assumptions