Alphabet Stock May Be 30% Undervalued: Analysts Weigh In

Alphabet's stock price may be undervalued by as much as 30%, according to estimates based on the company's cash flow. The tech giant has delivered a 152.8% gain over the past three years, but its valuation is now being reevaluated in light of its growing cloud business and rising share of group revenue.

Google Cloud's reported $514 billion backlog and increasing share of Alphabet's revenue have led to expectations of higher cash generation and capital requirements. The company's Discounted Cash Flow (DCF) intrinsic value estimate values Alphabet at a substantially higher price than its current stock price of $338.24.

The DCF approach assumes growing free cash flow through the early 2030s, despite heavy AI and data center spending. This growth profile supports rising cash generation available to equity holders without relying solely on search or ads.