Key Stats for Alphabet Stock
- Current Price: $344.82
- Target Price (Mid): ~$625
- Street Target: ~$428
- Potential Total Return: ~81%
- Annualized IRR: ~15% / year
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What Happened?
Alphabet (GOOGL) closed at $344.82 on August 21, roughly 14% below its May high near $402, even after a quarter that beat on almost every line that matters. On August 19, Marvell disclosed it had granted Google a warrant to buy up to $12.2 billion of its stock in exchange for a multiyear custom-chip commitment. Marvell shares jumped roughly 10%. Alphabet barely moved.
A business growing revenue 24% with a cloud arm compounding above 80% trades near 17 times earnings, cheaper than every mega-cap except Meta, while Microsoft sits near 28x and Apple near 39x. Either the market sees a problem that the numbers do not show, or it is undervaluing the most profitable AI scaler in big tech.
The Marvell Deal Shows the Buildout Is Still Widening
Per Marvell’s regulatory filing reported by Reuters, Google received a warrant for up to 58.97 million shares at $206.58 each, vesting in tranches tied to every $500 million of chips it buys, with targets running through fiscal 2033. Reuters estimated the arrangement could bring Marvell roughly $120 billion in revenue over that span if Google hits its spend.
The longer read favors Alphabet. This is a supply agreement, not a signed $12.2 billion check, and the stake only builds as Google spends. What it confirms is that Alphabet is broadening its silicon supply beyond Broadcom, its primary custom-chip partner through 2031, to feed a TPU roadmap running flat out. On the Q2 call, CEO Sundar Pichai said the company “continue[s] to be supply constrained, a sign of momentum and rapid adoption.” Alphabet raised full-year 2026 CapEx guidance to $195 billion to $205 billion, up from $180 billion to $190 billion, and CFO Anat Ashkenazi told analysts it began recognizing revenue from selling its own TPU systems into customer data centers for the first time. The Marvell deal is the procurement machinery behind those numbers becoming visible.
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The Quarter the Market Shrugged At
Revenue hit $119.8 billion, up 24%, the 12th straight quarter of double-digit growth. Operating income rose 30% to $40.8 billion, and Cloud revenue grew 82% to $24.8 billion as segment operating margin expanded from 20.7% to 35.6%. GAAP EPS came in at $9.11, but that figure included roughly $98 billion of unrealized gains on Alphabet’s equity holdings, which Ashkenazi flagged on the call, so it reflects mark-to-market moves rather than the operating business. Net income was $112.1 billion for the same reason. The operating lines, not EPS, carry the quarter. Backlog climbed to $514 billion, with management expecting to convert just over half within 24 months.
On the TIKR Competitors page, Meta trades near 9x NTM EV/EBITDA and Reddit near 15x, against Alphabet at roughly 16x. Alphabet carries a modestly higher multiple than Meta, but it pairs a dominant Search franchise with cloud growth above 80% and a custom-silicon operation neither peer can match. The overhang is sentiment, not fundamentals: a summer of senior AI departures, including chief scientist Jeff Dean, rattled confidence even as the financials held.
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TIKR Advanced Model Analysis
- Current Price: $344.82
- Target Price (Mid): ~$625
- Potential Total Return: ~81%
- Annualized IRR: ~15% / year
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The TIKR Valuation Model’s mid-case values GOOGL near $625, realized at the end of 2030, about 81% above today at a roughly 15% annual return. It rests on two revenue drivers: Cloud sustaining growth well above the corporate average as backlog converts, and Search holding up as Gemini expands the pool of monetizable queries, which management says grew Search and Other revenue 17% to $63.3 billion. The margin driver is Cloud operating leverage, up 15 points year over year with room to run.
The primary risk is the spending. CapEx above $195 billion has already turned quarterly free cash flow negative, and Ashkenazi warned of “modest margin pressure” as Alphabet leans on costlier third-party capacity to bridge supply. The upside: revenue keeps compounding in the mid-teens, margins expand, and the multiple re-rates toward peers. The downside: AI returns arrive slower than the spend, and free cash flow stays compressed longer than the model assumes.
Conclusion
The warrant vests only as Google spends, so the cleanest proof the buildout is working will be Marvell’s own revenue disclosures and Alphabet’s Cloud line, not the headline deal size. When Alphabet reports Q3 on October 27, Cloud growth holding above 70% alongside a first step back toward positive quarterly free cash flow would tell investors the spending cycle is converting. A second quarter of cash burn with decelerating Cloud would hand the bears their case and keep the multiple pinned near 17x. That is the level where the market is asking Alphabet to prove the spend pays before it pays up for the growth.
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Should You Invest in Alphabet?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Alphabet, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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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 stocks mentioned. Thank you for reading, and happy investing!
