ALPHABET INC. (GOOGL): what the price requires
At today's price, ALPHABET INC. (GOOGL) is priced for today's economics sustained for ~7.6 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-13 · Source: https://boothcheck.com/report/GOOGL
Headline
| Field | Value |
|---|---|
| Ticker | GOOGL |
| Company | ALPHABET INC. |
| Sector / Industry | Technology |
| Current price | $352.99/sh |
| Composition | Google Search & other 56% / YouTube ads 10% / Google Network 7% / Google subscriptions, platforms, and devices 12% / Google Cloud 15% / Other Bets 0% / Hedging gains (losses) 0% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | segment |
| Must persist for | 7.6y |
Solve inputs: computed at a 9.7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~4.4 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| cohort percentile (of 177 peers) | 94 |
| sustained it ~7.6 years at this level | 21% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.49x | 5 | expensive |
| Earnings | 4.62x | 5 | expensive |
| Relative | 1.08x | 5 | expensive |
| Growth | 0.80x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.1%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $442.89 | 0.80x | yes | FCF base $187.4B, growth 17% (input: historical growth), terminal g 4.0%, WACC 9.1%, 6yr projection |
| DCF Exit Multiple | Growth | $447.97 | 0.79x | yes | Exit EV/EBITDA: 27.7x / 29.7x / 31.7x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $341.13 | 1.03x | yes | P/E 35x (sector median), scenarios: 28.5x / 35.0x / 41.5x (bear / base = sector held flat / bull), EV/EBITDA 25x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $101.17 | 3.49x | yes | BV/sh $38.53, ROE (TTM) 24.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $164.31 | 2.15x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $370.60 | 0.95x | yes | Rev $422.5B, growth 17% (input: historical growth; tapered), Terminal P/S: 8.3x / 10.2x / 12.1x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $328.11 | 1.08x | yes | EPS $9.37, growth 35% (input: historical EPS growth), PEG=1.08 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $76.40 | 4.62x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $101.29B × (1−19%) / WACC 9.1% → EPV (no growth) |
| Residual Income | Asset | $148.70 | 2.37x | yes | BV $38.53 + 5yr PV of (ROE (TTM) 24.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $90.15 | 3.92x | yes | √(22.5 × EPS $9.37 × BVPS $38.53) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $297.96 | 1.18x | yes | EBITDA $144.61B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $59.46 | 5.94x | yes | FCF $64429.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $34.04 | 10.37x | yes | SBC-adj FCF $35.65B (FCF $64.43B − SBC $28.78B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $302.48 | 1.17x | yes | EPS $9.37 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $30.99 | 11.39x | yes | BV $38.53 × (ROIC 7.3% / WACC 9.1%) |
| P/Sales Sector | Relative | $276.19 | 1.28x | yes | Revenue $422.50B × sector P/S 8.0x |
| PEG Fair Value | Relative | $351.54 | 1.00x | yes | EPS $9.37 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $101.35 | 3.48x | yes | EPS $9.37 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Build Of Price (Sum Of The Parts)
The price decomposes into a demonstrated fundamentals base plus a segment premium. Each segment is an additive contributor to the premium at peer-cohort economics, not an independent defender of an allocated target.
| Component | Per share |
|---|---|
| Fundamentals base | $323.15 |
| Forward-optionality premium | $29.84 |
| = Current price | $352.99 |
Discount rate: 10.0% cost of equity.
Core Pieces (The Demonstrated Base, By Reportable Segment)
| Core piece | Revenue | Trend | Margin | Floor/sh | Own optionality/sh |
|---|---|---|---|---|---|
| Google Services | $342.7b | growing +12.4%/yr | 41% | $284.16 | +$35.22 |
| Google Cloud | $58.7b | growing +35.8%/yr | 24% | $38.99 | +$13.96 |
| Other Bets | $1.5b | declining -6.7%/yr | -489% | $0.00 | — |
Floor shares sum to the base. Each piece carries its own forward optionality on top of its demonstrated value; these draw on the same premium the named bets below also draw on, not a separate pool.
Named Segments (Standalone Central Values)
| Segment | Category | Central value/sh | Scenario range/sh | Strategic floor/sh | Peer cohort |
|---|---|---|---|---|---|
| Waymo | transport-rideshare | $7.49 | $1.16 – $47.95 | $0.19 | UBER, LYFT, TSLA |
| Isomorphic Labs | rd-venture | skipped: Category "rd-venture" has zero or invalid EV/opInc multiple; cannot contribute to SOTP. | |||
| Verily Life Sciences | rd-venture | skipped: Category "rd-venture" has zero or invalid EV/opInc multiple; cannot contribute to SOTP. | |||
| Wing (drone delivery) | rd-venture | skipped: Category "rd-venture" has zero or invalid EV/opInc multiple; cannot contribute to SOTP. | |||
| X moonshot factory + other early-stage | rd-venture | skipped: Category "rd-venture" has zero or invalid EV/opInc multiple; cannot contribute to SOTP. |
The standalone values sum to only $7.49, short of the $29.84 premium: the named bets do not account for the whole premium; the rest is the established core's durability and forward optionality.
At central scale the combined named-segment contribution spans $4.65 – $12.06 as timing varies (an honest range, not a point).
Solvency
| Field | Value |
|---|---|
| Net cash | $45.1b |
| Net debt / NOPAT (after-tax) | -0.42x (net cash) |
| Net debt / operating income (pre-tax) | -0.34x (net cash) |
| Interest coverage | 136.8x |
| Share count CAGR (buyback) | -1.5% |
| Burning cash | no |
Bullet Takeaways
- Alphabet is an advertising annuity funding an enterprise-cloud land grab: Search and other brought in $224.5B of FY2025 revenue at Google Services' 40.7% blended margin, while Google Cloud accelerated to 63% growth in Q1 2026 on the back of enterprise AI demand.
- The biggest specific risk is legal, not competitive: a December 2025 final judgment already restricts how Google distributes its services and forces search-data sharing with competitors, the company's appeal is pending, and a separate DOJ track keeps Chrome and Android divestiture on the table per the FY2025 10-K.
- Watch the late-July second-quarter report for whether Cloud holds its reacceleration while management works through what the CEO called being compute constrained in the near term.
Bull Case
The moat is measurable in the margin data. Google Services turned 73% of Alphabet's revenue into a 40.7% operating margin in FY2025, and its operating income grew $18.1B year over year, which the 10-K attributes to revenue growth "partially offset by an increase in expenses related to legal and other matters, TAC, and content acquisition costs". Search at $224.5B of revenue remains the single most profitable large-scale business on the public markets, and the structural advantage is distribution plus data plus an ad auction refined over two decades. What has changed is that the second act is no longer hypothetical: Google Cloud grew 63% in Q1 2026 to $20.0B of quarterly revenue, accelerating from 48% the prior quarter, and the FY2025 10-K discloses "$ 242.8 billion of remaining performance obligations" primarily related to Cloud, with just over half expected to convert to revenue within two years. That backlog is contracted demand, not hope.
The AI transition, the thing the bear narrative says threatens Search, is so far showing up as a revenue accelerant. Revenue from products built on Google's generative AI models grew nearly 800% year over year in Q1 2026, and Gemini Enterprise's paid monthly active users grew 40% quarter over quarter. Management says the constraint is supply: the CEO told investors cloud revenue would have been higher had capacity been available. Against Microsoft, whose Intelligent Cloud runs greater scale, and Amazon, Alphabet is the smallest of the three hyperscalers with the fastest current growth rate, which is the position you want when the market for enterprise AI infrastructure is still being allocated.
Then there is the portfolio the market barely prices. Waymo, the most mature of the Other Bets, raised $16B in February 2026 at a $126B post-money valuation, runs roughly 500,000 paid rides a week across 11 US cities, and went driverless in Las Vegas in July with Denver, San Diego, and Tampa next. Its rideshare peers give the scale context: Uber and Lyft built the demand network Waymo now serves without a driver in the seat. Isomorphic Labs, Verily, and Wing sit behind it at earlier stages, collectively inside an Other Bets segment reporting just $1.5B of revenue against deep losses, which is to say the market gets the whole venture portfolio for a rounding error on a $4.37T company. All of it is funded from a fortress: $45.1B of net cash, interest covered over one hundred times, and a share count shrinking 1.5% a year under a repurchase program the 10-K describes as "a $70.0 billion share repurchase program" authorized in April 2025 on top of the prior $70.0B.
Bear Case
The fragile assumption in the price is not Search revenue; it is Cloud endurance. Today's price embeds Google Cloud growing at its self-funding ceiling, roughly the mid-twenties percent, for about eight more years; historically only about one in five comparable fast-growers sustained that pace for that long, and Cloud's multiple sits at the very top of its peer distribution. The bet is demanding even before the competitive facts arrive: Google Cloud's FY2025 operating margin was 23.7% against Microsoft Intelligent Cloud's 42.0%, so the segment being asked to carry the premium earns barely half the margin of the rival it is chasing, and the CEO's own admission of being compute constrained cuts both ways, since growth bought with $180B-scale capex is growth that must eventually clear its cost of capital.
The legal overhang is no longer hypothetical either. The FY2025 10-K states that after the district court ruled against Google, "A final judgment was entered in December 2025, which, among other things, imposes restrictions on how Google distributes its services and requires Google to share certain search data with and offer syndication services to certain competitors", and the company appealed in January 2026. Forced data sharing attacks the quiet engine of the Search moat, the feedback loop between query volume and result quality, and the separate remedies track still contemplates structural outcomes up to Chrome and Android divestiture. The risk-factor section concedes the costs of implementing remedies "could harm our business, reputation, financial condition, and operating results". None of that has to end Search dominance to compress a multiple that already sits above what peer-multiple methods support.
The Other Bets, meanwhile, are a real cash cost with a speculative payoff profile. The segment produced $1.5B of revenue in FY2025 against an operating loss several times larger, and the flagship, Waymo, operates in a business where the graveyard is fresh: Cruise shut down in 2024 and Argo AI in 2022. Waymo's own $126B private mark roughly matches what a central scenario supports, fifty billion dollars of mature revenue a decade out at rideshare economics, but that scenario has to survive fleet economics, city-by-city regulation, and now a scaled Tesla robotaxi push into the same markets. If Cloud growth fades toward the sector's ordinary pace while remedies bite at Search distribution, the roughly $34 a share of forward optionality in the price deflates toward the couple of dollars the venture portfolio's invested-capital floors defend, and the stock rerates on a Services multiple that the asset-value and earnings-power lenses already call rich.
Valuation
Alphabet at $357.17 (July 10, 2026) is a stack of unequal businesses priced as one share. The demonstrated operations, valued at peer multiples, support about $323.15 of it: Search and other at $224.5B of revenue, YouTube ads at $40.4B, Network at $29.8B, and subscriptions, platforms, and devices at $48.0B, all inside Google Services' 40.7% blended margin, plus Google Cloud's $58.7B growing 35.8% for the year at a 23.7% margin per the FY2025 10-K segment disclosures. The remaining $34.02 a share is the premium the market pays for what comes next, and the price locates most of that bet in one place: Cloud sustaining growth near its self-funding ceiling for roughly eight years, an assumption only about 20% of comparable fast-growers have historically delivered.
The valuation methods split along exactly that line. Peer multiples land within about 9% of the price and the forward-growth methods actually sit above it, crediting the compounding; the asset-value and earnings-power lenses land at a third to a quarter of it, which is what those frames always say about a business whose value is duration rather than book. The pattern reads as a growth-durability bet the static methods structurally cannot price, with the disagreement narrower than it looks because the two frames that account for forward economics both roughly defend today's level.
The named ventures fill in only a slice of the premium. Waymo carried at rideshare economics contributes about $8.51 a share in a central scenario, $50B of mature revenue a decade out, with the honest range spanning roughly $5 to $14 as the timing shifts sooner or later; its cohort context is Uber and Lyft on the demand side and Tesla on the autonomy side. Isomorphic Labs, Verily, and Wing route to venture economics with no defensible multiple, so they enter the build at their small invested-capital floors rather than at modeled values. Summed, the named segments explain about $9 of the $34 premium; the remainder is the market crediting the core's own durability, chiefly Cloud. The balance sheet makes the bet comfortable to hold: $45.1B of net cash, interest coverage over one hundred times, a shrinking share count, and $138.1B of trailing operating income mean the downside is a valuation event, not a solvency one.
Catalysts
The next print lands in late July, and one number will dominate the read: whether Google Cloud holds anything near the 63% growth it posted in Q1 2026, when revenue reached $20.0B and management said demand exceeded available capacity. Gemini Enterprise's paid seats grew 40% quarter over quarter and revenue from generative-AI products grew nearly 800% year over year, so the market is watching the capacity buildout convert backlog, $242.8B of remaining performance obligations at year-end, into recognized revenue.
The antitrust calendar runs in parallel. Google appealed the December 2025 final judgment in January 2026, and the DOJ's separate appeal seeks stronger structural remedies, with forced divestiture of Chrome or Android still discussed as outcomes; briefing and argument through the remainder of 2026 will move the discount the market applies to Search distribution. On the venture side, Waymo's expansion cadence is itself a dated catalyst series: driverless Las Vegas went live July 8, 2026, with Denver, San Diego, and Tampa announced next, a stated target of one million paid rides a week by year-end, and international pilots in London and Tokyo funded by February's $16B round.
Peer Cohorts (Per Segment, With Filing Citations)
Google Services (reported)
- MSFT (MICROSOFT CORPORATION)
- (no filing in the citation store)
- META (Meta Platforms, Inc.)
- (no filing in the citation store)
- AMZN (AMAZON COM INC)
- (no filing in the citation store)
- AAPL (Apple Inc.)
- (no filing in the citation store)
- TTD (TRADE DESK, INC.)
- (no filing in the citation store)
Google Cloud (reported)
- MSFT (MICROSOFT CORPORATION)
- (no filing in the citation store)
- AMZN (AMAZON COM INC)
- (no filing in the citation store)
- ORCL (Oracle Corp)
- (no filing in the citation store)
Waymo (speculative)
- UBER (UBER TECHNOLOGIES, INC.)
- (no filing in the citation store)
- LYFT (Lyft, Inc.)
- (no filing in the citation store)
- TSLA (Tesla, Inc.)
- (no filing in the citation store)
Isomorphic Labs (speculative)
- RXRX (RECURSION PHARMACEUTICALS, INC.)
- (no filing in the citation store)
- CRSP (CRISPR THERAPEUTICS AG)
- (no filing in the citation store)
- SDGR (SDGR)
- (no filing in the citation store)
Verily Life Sciences (speculative)
- LH (LABCORP HOLDINGS INC.)
- (no filing in the citation store)
- DGX (QUEST DIAGNOSTICS INC)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Build of price (SOTP): the price is decomposed into a demonstrated fundamentals base plus a segment premium. Per-segment contributions are computed under peer-cohort category economics. Segments are additive contributors; no per-segment allocated target is imposed.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release · Q1 2026 earnings call coverage · Q1 2026 earnings coverage · Electrek, July 8, 2026; TechCrunch, February 2026 · Q1 2026 earnings release; CNBC, April 29, 2026 · Q1 2026 earnings coverage; FY2025 10-K · FY2025 10-K; Phemex Academy, 2026 · Electrek, July 8, 2026; TechCrunch, February 2, 2026