Key Takeaways
- Alphabet rose 3% today as Big Tech, led by Amazon, rallied after the midterms.
- The bounce looks like relief, since a new Congress doesn’t fix the Search miss or negative free cash flow.
- Suppliers like Vertiv fell on worries of US data-center curbs, while Meta, another big AI spender, gained less.
Alphabet (GOOG) rose 3% and Amazon (AMZN) jumped 6% today as Big Tech led stocks higher after Democrats won control of the House and Senate on Tuesday.
Yahoo Finance Executive Editor Brian Sozzi offered a reason: tighter data-center rules could mean hyperscalers like Alphabet and Amazon “will be forced to pull back on spending, which would boost free cash flow.” Suppliers went the other way, with Vertiv (VRT) down 13%. And Meta Platforms (META), another big AI spender, rose only 1%.
TIKR tracks 58 analysts on Alphabet. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Alphabet, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Alphabet’s Analyst Ratings
The earnings outlook holds
Alphabet had its worst month ever after a third-quarter report with a Search miss and a $9 billion cash burn. Congress can’t fix either.
Analysts still expect normalized EPS to rise through 2028:
The 2027 estimate of $15.18 is barely above 2026’s $14.90, before a jump of about 20% in 2028. Today’s news shouldn’t change that.
The stock came into today at 20x forward earnings, under its five-year average of 23x:
The cash is still going out
Free cash flow went from $24.5 billion in the September quarter of 2025 to negative $9.1 billion a year later:
Slower US building could help. But Google pledged $15 billion this morning for Malaysian data centers. My read: a crackdown would push some of that spending overseas.
That’s Vertiv’s question too: its Americas sales grew 75% last quarter, against 50% in Asia Pacific. Its next report should show whether faster growth abroad can offset a US slowdown.
Amazon has the same cash problem, but its AWS revenue grew 39% last quarter while Alphabet’s Search missed.
Meta is the odd one out, with negative free cash flow of $2.1 billion last quarter and up to $145 billion of capex planned for 2026. If investors were betting on forced spending cuts, it should be up as much as anyone, so I doubt that’s today’s story.
Enjoy it, but watch February
Alphabet’s below-average multiple is a better reason to own it than anything Washington did, and its 2027 capex figure, expected in early February, is the real test.
Of course, if Congress slows the US build-out, Alphabet’s cash could recover faster than analysts expect.
So what is Alphabet stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Alphabet could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
