5 Most Profitable Cheap Stocks to Buy

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1. Alphabet Inc. (NASDAQ:GOOG)

Net Income (TTM) as of December 31, 2022: $59.97 billion

Alphabet Inc. (NASDAQ:GOOG) is a stock that faces competition given Bing’s impending incorporation of ChatGPT, which many users find useful even if it makes a lot of mistakes. Nevertheless, Alphabet Inc. (NASDAQ:GOOG) has its own AI technology in Bard which the company plans to launch this year and as of February 10, the tech giant’s stock has a forward P/E ratio of 15.58. Alphabet Inc. (NASDAQ:GOOG) has been one of the most profitable companies in the world in 2022 with net income of almost $60 billion according to YCharts. As a result, Alphabet Inc. (NASDAQ:GOOG) ranks #1 on our list of 11 Most Profitable Cheap Stocks to Buy.

Polen Global Growth Strategy commented on Alphabet Inc. (NASDAQ:GOOG) in a Q4 2022 investor letter,

Alphabet Inc. (NASDAQ:GOOG) revenues were up 11% constant currency with a 6% FX headwind to reported revenue growth during the most recent quarter. This was a deceleration in growth and Operating Income declined year over year, but this was due to incredibly difficult comparisons from the prior year. On a two-year basis, Total Revenue, Search Revenue, and YouTube Revenue all grew at roughly a ~20% CAGR, as did Operating Income. The Google Cloud Platform continued to grow at a strong pace. Margins expanded significantly last year given the incredibly strong growth and are now falling back to a more normal level as revenue growth moderates on those tough comps. While management did note a small impact from the softening economic environment (ad budgets are easy to adjust down and then back up as we saw during the pandemic), we believe underlying trends in the business remain healthy for the long term.

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