Alphabet Inc. (GOOGL): A Bull Case Theory

We came across a bullish thesis on Alphabet Inc. (GOOGL) on Substack by LongTermValue Research. In this article, we will summarize the bulls’ thesis on GOOGL. Alphabet Inc. (GOOGL)’s share was trading at $157.04 as of April 2^nd. GOOGL’s trailing and forward P/E were 19.53 and 17.64 respectively according to Yahoo Finance..

A laptop and phone open to Google’s services in an everyday setting.

Alphabet maintains its dominance across web search (Google), video streaming (YouTube), cloud computing (Google Cloud), mobile operating systems (Android), and autonomous driving (Waymo). Its near-monopoly in search fuels exceptional margins exceeding 90%, solidifying its leadership in multiple high-growth industries. Despite recent concerns over AI-driven search disruption and regulatory risks, the company is projected to generate ~$180 billion in free cash flow by 2030, supported by an estimated 15% EPS growth in 2026. Alphabet trades at a 2025 P/E of 18x and 2026 P/E of 15.8x, with a PEG ratio of ~1.1x, reflecting a reasonable valuation given its long-term growth potential. The stock is currently 20% off both its 30-day and all-time highs, creating an intriguing entry point for investors who believe Alphabet can successfully navigate competitive threats in AI search and regulatory challenges. Historical SOTP valuations estimate the stock’s intrinsic value between $225 and $250 per share, suggesting a meaningful upside. While Alphabet’s valuation is not at a historical trough—its 2-year forward P/E hit ~12.5x in 2022—it remains attractive for those confident in its ability to sustain dominance in AI, cloud computing, and digital advertising over the long term.

Alphabet Inc. (GOOGL) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 234 hedge fund portfolios held GOOGL at the end of the fourth quarter which was 202 in the previous quarter. While we acknowledge the risk and potential of GOOGL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.