Is GOOGL a good stock to buy? We came across a bullish thesis on Alphabet Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on GOOGL. Alphabet Inc.’s share was trading at $298.48 as of March 6th. GOOGL’s trailing and forward P/E were 27.62 and 26.11 respectively according to Yahoo Finance.
Alphabet Inc. offers various products and platforms in the United States and internationally. It operates through Google Services, Google Cloud, and Other Bets segments. GOOGL reported strong financial results for the fourth quarter of 2025, highlighting accelerating growth driven by artificial intelligence and cloud computing. The company generated $113.8 billion in quarterly revenue, representing 18% year-over-year growth and exceeding expectations, while earnings per share reached $2.82, also beating estimates.
Net margin expanded to 30.3%, reflecting strong operating leverage despite heavy AI-related investments. For the full year, Alphabet reported $403 billion in revenue, up 15% year over year, and generated $73.3 billion in free cash flow, underscoring its ability to fund large-scale AI and infrastructure investments internally.
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Growth was supported primarily by the company’s core segments. Google Search remained the largest contributor with $63.1 billion in revenue, growing 16.7% year over year as new AI-powered features such as AI Mode and AI Overviews improved query understanding and monetization.
Meanwhile, Google Cloud delivered one of the strongest performances across the company, with revenue increasing 47.8% year over year to $17.7 billion and operating margin reaching 30.1%. Strong enterprise demand for AI infrastructure, supported by proprietary TPUs, NVIDIA GPUs, and Gemini-based platforms, drove rapid customer adoption, with the number of billion-dollar contracts signed in 2025 exceeding the previous three years combined.
Artificial intelligence also emerged as a central growth driver across Alphabet’s ecosystem. Gemini became the company’s core AI platform, reaching 750 million monthly active users and gaining rapid enterprise adoption with over 120,000 organizations using the platform. YouTube continued to expand its ecosystem as well, surpassing $60 billion in annual revenue while subscriptions grew faster than advertising, supported by AI-powered creator tools and rising engagement on Shorts.
While Alphabet continues to invest heavily in infrastructure, including expected capital expenditures of up to $185 billion in 2026, management believes these investments will support long-term growth as demand for AI services remains strong. With strong cash generation, accelerating cloud momentum, and expanding AI integration across products, Alphabet appears well positioned to sustain long-term growth despite near-term margin pressure from elevated infrastructure spending.
Previously, we covered a bullish thesis on Alphabet Inc. (GOOGL) by FluentInQuality in May 2025, which highlighted the company’s dominance in digital distribution through Search, Android, YouTube, and its long-standing AI leadership via DeepMind and Gemini. GOOGL’s stock price has appreciated by approximately 88.37% since our coverage. Sergey shares a similar view but emphasizes accelerating AI-driven growth and strong cloud momentum.
Alphabet Inc. is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 288 hedge fund portfolios held GOOGL at the end of the fourth quarter which was 243 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 time frame. If you are looking for an AI stock that is more promising than GOOGL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
