From Yahoo Finance: 2025-05-04 15:10:00

Alphabet reported strong Q1 2025 earnings, raising its dividend by 5%. Revenue increased by 12%, with operating income up 20% and EPS climbing 49%. Google Search and YouTube drove high-margin results, leading to a 10-year-high operating margin.

Despite excellent results, Alphabet stock has underperformed, attributed to increased spending and competition for Google Search. Capex surged 43% YoY, reaching $17.2 billion, fueling uncertainty about Google Search’s dominance.

Alphabet’s buyback program is robust, totaling $17.5 billion in Q1 2025. Over the last five years, the company reduced its share count by 10.9%, boosting EPS growth. With a low P/E ratio of 17.7, Alphabet offers a bargain opportunity for investors.

Alphabet’s valuation reflects skepticism about its AI monetization and market share retention. The stock is priced like a value stock, despite being a growth stock historically. The dividend yield is modest due to buybacks, offering a unique opportunity for investors.

Investors should monitor Alphabet’s capex, cloud competition, and Google Search resilience before buying. Despite strong fundamentals, the stock remains undervalued, presenting an attractive buying opportunity for those willing to weather short-term challenges.



Read more at Yahoo Finance: Do Strong Earnings Results and a Dividend Hike Make Alphabet a Growth Stock to Buy Right Now?