GOOGL changes
Pick any two versions below to diff them.
- Price
- $320.58 → $283.82(−11.5%)
- Discount category
- Well below intrinsic value → Far below intrinsic value
- Next earnings
- Oct 28, 2026 → Jan 28, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices Alphabet at a discount for two reasons. It fears AI chatbots will pull clicks away from Google Search. It also fears antitrust rulings could force costly changes to its ad business. Heavy AI infrastructure spending adds to the worry, since investors are not yet sure it will earn a good return. Alphabet now also pays for this spending with new debt and new shares. For the gap to close, Google Cloud must keep growing fast. Search ad revenue must also keep growing even as AI-generated answers appear next to results. A US judge ruled in September 2026 that Google will not have to sell its ad exchange or ad server, only follow new auction rules. This removes the risk of a forced breakup in the US, but Google said it will appeal the liability ruling. In the EU, the Commission still says that only a sale of part of the ad business can fix the problem, and it fined Google under the Digital Markets Act in July 2026. removed: Alphabet will report added: The Q3 2026 removed: earnings on added: report of October 28, removed: 2026. That report will show whether added: 2026 showed Cloud added: revenue growth added: of 103% and Search removed: ad added: revenue growth removed: both continue at their current pace. added: of 12%. But capital spending of $51.4 billion was more than operating cash flow, so free cash flow was negative for a second quarter. The Q4 2026 report, expected in late January 2027, should give the 2027 capital spending plan. If removed: both trends added: Cloud and Search growth hold through early 2027, and the antitrust remedies do not cut ad revenue much, the discount can close over the next two to four quarters.
- Risks
- Google Cloud's growth depends on continued heavy AI spending by Alphabet and by its customers. If AI infrastructure spending slows, Cloud growth can slow with it. AI chatbots and AI-generated answers could reduce the number of clicks on search ads over time. This effect is hard to measure today, since search ad revenue is still growing. Alphabet's capital spending is now removed: about equal to added: more than its operating cash flow. removed: It added: In Q3 2026, capital spending was $51.4 billion and operating cash flow was $42.3 billion. Alphabet pays for the removed: rest added: difference with new notes and new shares. If the AI spending does not earn a good return, the new shares dilute owners for no gain. Antitrust cases continue on many fronts. Google will appeal the US ad tech ruling, and the US search case is on appeal, where the government asks for a ban on default-search payments. The EU can still order a sale of part of the ad business, and it fined Google 890 million euros under the Digital Markets Act in July 2026. Publishers also seek more than $3.2 billion in damages in New York.
- Balance sheet
- Cash: removed: $242.5B added: $265.1B Debt: removed: $101.1B added: $125.1B Net cash: removed: $141.4B added: $140.0B Ratings: Moody's Aa2 (stable outlook), S&P AA+ (stable outlook) Alphabet has more cash than debt, but it now uses outside capital to pay for its AI build-out. The reason is spending: capital expenditure of removed: $80.6 added: $132.0 billion in the first removed: half added: nine months of 2026 removed: almost equaled added: was more than operating cash flow of removed: $84.9 added: $127.1 billion. removed: The added: In Q3 2026 alone, free cash added: flow was negative $9.1 billion. At September 30, 2026, cash, cash equivalents and marketable securities were $265.1 billion. This figure includes removed: $87.1 billion of equity securities, removed: of which $80.0 billion are added: such as SpaceX removed: shares that added: shares, whose value moves with the market: Alphabet removed: cannot sell at this time. Without added: recorded a $8.7 billion loss on equity removed: securities, cash and debt securities added: in Q3 2026. Non-marketable securities were removed: about $155.4 added: a further $135.2 billion. Debt is the removed: face added: carrying value of long-term removed: debt, almost all fixed-rate senior unsecured notes added: debt at added: September 30, 2026, $125.1 billion, up from $46.5 billion at the removed: parent. added: end of 2025. It does not include removed: $18.0 added: $16.8 billion of added: non-current operating lease removed: liabilities and $2.6 billion of finance lease liabilities. In the first removed: half added: nine months of 2026, Alphabet removed: issued $51.8 added: raised $85.2 billion of removed: notes in US dollars and five other currencies. In June 2026, it raised $49.6 added: debt, $42.9 billion removed: net from new added: of common stock and added: $19.1 billion of mandatory convertible preferred stock. removed: A new $40.0 added: $27.6 billion added: of the at-the-market share program was removed: not yet used added: still unused at removed: June added: September 30. Alphabet bought back no shares in removed: that half. added: 2026. Interest expense was removed: only $1.8 added: $1.0 billion in removed: the half, and the $25.0 billion commercial paper program was unused. After June 30, Alphabet sold $25.0 billion added: Q3 2026, against interest income of removed: US dollar notes in August 2026 and 5.5 billion Australian dollars of notes. Off the balance sheet, Alphabet backs third-party data centers and power. added: $1.8 billion. The removed: maximum future payments are $7.6 billion in guarantees and $43.8 billion in credit derivatives. The balance sheet can carry the AI program. But the new shares and preferred stock dilute owners, so the return on that spending matters more than before. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 28, 2026: Q3 2026 results: Cloud growth, Search ads and capex. removed: Pending. added: Passed. Watch: Google Cloud growth near the Q2 pace of 82% and continued Search ad growth pass; a sharp Cloud slowdown or falling Search revenue fails. added: Outcome: Cloud revenue grew 103% and Search & other revenue grew 12%, but free cash flow was negative $9.1 billion. Q4 2026 (estimate): Final judgment and appeals in the US ad tech case. Pending. Watch: A final judgment that keeps the no-divestiture remedy, with no government appeal that asks again for a sale of AdX or DFP, passes; a government appeal that asks for a forced sale fails. Dec 2026 (estimate): Appeals court hearing in the US search case. Pending. Watch: A ruling that keeps the 2025 remedies or narrows them, with default-search payments still allowed, passes; a ruling that bans those payments fails. removed: Feb added: Jan 28, 2027 (estimate): Q4 2026 results and 2027 capital spending plan. Pending. Watch: Cloud and Search growth that hold into early 2027 with capex that cash flow can mostly fund passes; a slowdown with still higher capex and more share issuance fails.
- Recent events
- Oct added: 28, 2026: Alphabet reported Q3 2026 results. Revenue grew 25% to $127.6 billion. Google Cloud revenue grew 103% to $30.7 billion, and Cloud operating income was $11.1 billion. Google Search & other revenue grew 12% to $63.4 billion. Operating income grew 30% to $40.6 billion. A $8.7 billion loss on equity securities cut net income to $26.5 billion and diluted EPS to $2.12. Capital spending was $51.4 billion and operating cash flow was $42.3 billion, so free cash flow was negative $9.1 billion. In the quarter, Alphabet sold $12.4 billion of new shares through its at-the-market program and $28.7 billion of notes. It bought back no shares. Oct 26, 2026: Anthropic filed for its initial public offering. Its S-1 shows that it committed to spend at least $114.5 billion with Google between April 2026 and July 2033, and it expects to buy about $125-150 billion more of TPU compute from 2028 to 2031. Google put $10 billion into Anthropic's Series H round. Google's stake is limited to 14.99%, and Google has an option to buy up to $10 billion of stock at the IPO price. Oct 13, 2026: Google released its Gemini 4 Argon AI model to developers and businesses worldwide. Google AI Pro and Ultra subscribers can also use it in the Gemini app and in AI Mode in Search. The launch API price is $2 per million input tokens and $10 per million output tokens, and Google will double these prices after November 30, 2026. Oct 7, 2026: A Finnish authority ordered Google to stop preparation work at two data center sites, in Muhos and Kajaani, until environmental assessments are done. Google said it will obey the order. Oct 6, 2026: Google and Constellation Energy signed a 20-year agreement for 890 megawatts of new nuclear capacity on the PJM grid, from uprates at 11 existing reactors. The first uprate is due by 2028, and all of it by the end of 2032. A separate 15-year agreement covers 2,700 megawatts of existing Constellation generation. Constellation will also use Google Cloud and Gemini Enterprise in its operations. Oct 2, 2026: Google and the US government sent a joint draft of the final judgment in the ad tech case to the judge. They still disagree on some terms, such as the deadlines. An appeal can start only after the judge enters the final judgment. Sep 30, 2026: A federal judge in New York ruled that a class of about 5,000 publishers, USA Today and Daily Mail can seek more than $3.2 billion in damages from Google over its AdX ad exchange. The judge dismissed some other publisher claims. Google said it will defend the rest in court. The judge has not set a trial date. Sep 2, 2026: A US judge in Virginia ruled that Google does not have to sell its AdX ad exchange or its DFP ad server. For six years, AdX must bid into rival ad servers on equal terms, publishers can export their AdX bid data, and publishers that use DFP do not have to use AdX. A monitor will check compliance. Google said it will appeal the liability ruling. Aug 10, 2026: Alphabet sold $25.0 billion of US dollar notes in ten parts that mature from 2028 to 2066. On August 27, 2026, it also sold 5.5 billion Australian dollars of notes, its first in that currency. Jul 23, 2026: The European Commission fined Google 890 million euros under the Digital Markets Act. This is its first fine against Google under that law. 460 million euros is for favoring its own services in Search, and 430 million euros is for rules that stop apps from sending users to offers outside Google Play. Jul 22, 2026: Alphabet reported Q2 2026 results. Revenue grew 24% to $119.8 billion. Google Cloud revenue grew 82% to $24.8 billion. Search revenue grew 17% to $63.3 billion. Alphabet increased its 2026 capital spending plan to $195 billion to $205 billion, from $180 billion to $190 billion. Sep 2, 2025: A US court ruled on remedies in Google's search antitrust case. Google keeps Chrome and Android. Google must end exclusive default-search deals and share some search data with rivals.