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GOOGL's scale and profits clash with NBIS' explosive growth. See which AI infrastructure stock comes out on top.
Alphabet's integrated AI infrastructure—custom TPUs, proprietary software, and unmatched data quality—creates a compounding competitive advantage across all business lines. Q1 results show 12% revenue growth and 20% operating income growth, with expanding margins and exceptional EPS acceleration, highlighting operational leverage and efficiency. Despite near-term growth moderation, Alphabet's diversified revenue streams, cost discipline, and AI-driven innovation support sustained high profitability and margin resilience.
Key Takeaways
GOOGL's recent underperformance is largely due to slower advertising growth, a relatively muted capex outlook, and higher D&A, which could pressure earnings. Despite the gradual pace of AI monetization in advertising, Google Cloud delivered strong growth and continued margin expansion in 1Q. The valuation gap between GOOGL and META reflects Meta's stronger ad growth and more aggressive FY2025 capex, 36% of total revenue, vs 19% for GOOGL.
I added additional shares of Alphabet, PepsiCo, and the Schwab U.S. Dividend Equity ETF to The Dividend Income Accelerator Portfolio to optimize our portfolio's risk-reward, income, and growth balance. Alphabet's attractive valuation, low payout ratio, and strong earnings growth boost our portfolio's dividend growth and capital appreciation potential. PepsiCo combines dividend income and dividend growth, enhancing our portfolio's income and stability.
AI is a main theme of second-quarter earnings as Alphabet reports this week. Tesla, Mattel, Hasbro and Coca-Cola also report, as Trump policies remain top of mind.
Companies with a market cap above $1 trillion are in a class of their own. They all have terrific businesses and have generally produced market-beating returns for years.
India's Enforcement Directorate agency, which probes economic crimes, has summoned representatives from Google and Meta to appear on Monday in connection with a case involving betting apps, ANI news agency reported on Saturday, citing official sources.
While there are lingering concerns about Google's search business in the long run, analysts see some positives ahead of upcoming second-quarter results.
GOOGL's second-quarter 2025 results are likely to reflect strength in Generative AI, Search, and Cloud amid rising cloud competition and stretched valuation.
Alphabet Inc. is undervalued due to market pessimism over competitive threats, but its fundamental AI advantages are overlooked. Alphabet's massive data moat, vertical integration, and self-sufficiency position it uniquely against Microsoft and Apple. Recent aggressive moves, like acquiring the Windsurf team, show Google is shifting from defense to offense in the AI war.