Is Now the Right Time to Invest in Alphabet After 70% Surge?
Investors are contemplating whether now is the right time to invest in Alphabet (GOOG) after its impressive 70% increase over the past year. However, amidst this surge, the stock has shown modest performance compared to the S&P 500 in 2026, with a 1% gain year-to-date.
Alphabet’s Recent Growth Trajectory
Over the last year, Alphabet has experienced significant revenue growth. The company reported year-over-year revenue increases in its quarterly results:
- Q1 2025: 12% growth
- Q2 2025: 14% growth
- Q3 2025: 16% growth
- Q4 2025: 18% growth
A major contributor to this growth has been the Google Cloud segment, which has seen impressive revenue growth rates:
- Q1 2025: 28% growth
- Q2 2025: 32% growth
- Q3 2025: 34% growth
- Q4 2025: 48% growth
Artificial Intelligence Impact
Additionally, Alphabet’s advancements in artificial intelligence (AI) have significantly boosted investor confidence. The AI application, Gemini, has amassed over 750 million monthly active users. CEO Sundar Pichai noted that search usage reached an all-time high, propelled by AI innovations.
Current Valuation of Alphabet Stock
Despite the recent surge in stock price, Alphabet’s price-to-earnings ratio stands at approximately 29. This valuation is reasonable considering the company’s strong revenue growth and the potential of its Google Cloud segment. In Q4, Alphabet’s advertising revenue accounted for $82 billion of its total $114 billion revenue, alongside $17.7 billion from Google Cloud and $13.6 billion from subscriptions and devices.
Financial Health and Capital Expenditures
At the end of 2025, Alphabet boasted a robust balance sheet, with nearly $127 billion in cash and marketable securities. This was an increase from about $96 billion in 2024. The company also operated with a solid net cash position, having long-term debt of only $47 billion.
