Google Stock Traders Overlooking Alphabet's Hidden Growth Potential
Alphabet, parent company of Google, may be one of the most overlooked stories among mega-cap tech stocks. Despite its impressive growth, Alphabet's stock trades at a relatively low valuation multiple.
In the latest earnings report, Google Cloud grew 82% year-over-year, while Azure, Microsoft's cloud computing platform, grew 43%. This discrepancy has led to a significant valuation gap between the two companies, with Alphabet trading at half the multiple of Microsoft. Furthermore, Alphabet's search and YouTube ad engine faces similar capex headwinds as Meta Platforms.
The bull case for Alphabet is based on its ability to sustain high cloud growth rates, which would lead to a breakout past $450. Analysts remain overwhelmingly positive about the company, with 13 strong buys and 44 buys against zero sells.