Alphabet Stock Price Looks Undervalued Amid Strong Earnings

Alphabet's stock price of $356.13 appears undervalued given its recent earnings performance and growth prospects. The company delivered a significant earnings beat in Q2, with revenue growing 24.23% year-over-year and operating income expanding 30%. Despite this strong performance, Alphabet trades at a forward P/E of roughly 17, which is below the S&P 500 average.

The stock's value may be further supported by its $514 billion Cloud backlog, which represents nearly half of the Fortune 100 companies using Google Cloud services. Analysts are cautiously optimistic about Alphabet's prospects, with 65 analysts covering the company and only zero Sell ratings.

However, some bears argue that Alphabet's aggressive capex spending and rising long-term debt may be a concern. The company suspended buybacks and nearly doubled its long-term debt to $98 billion as part of its $200 billion capex guidance, which pushed free cash flow negative.