Is Alphabet Stock a Buy?

By Neil Patel – Mar 2, 2026 at 4:30AM ESTKey PointsGoogle Cloud’s 48% Q4 revenue growth indicates the massive potential for this booming segment.Alphabet’s capital expenditures could approach $200 billion in 2025, significantly higher than the year before.Double-digit earnings growth and an inviting starting valuation can benefit investors.When it comes to leading internet companies, there might be no business that's more worthy of recognition than Alphabet (GOOGL +1.50%) (GOOG +1.39%).

The Silicon Valley success story has ascended to become a thriving global enterprise, with a market cap measured in the trillions of dollars. This tech stock has crushed it for shareholders in the past. But is Alphabet a buy right now? Image source: Getty Images. Ongoing growth and AI leadership In 2025, Alphabet reported 15% year-over-year revenue growth to $403 billion. This is extremely impressive for a business of such a massive scale. But it's also noteworthy just how broad-based the gains were. Google Search posted a 13% top-line increase, while YouTube's ad revenue was up 12%. Google Cloud is the star of the show, registering a monster 48% sales gain in the fourth quarter (ended Dec. 31, 2025). This segment is experiencing incredible demand from customers that want to work with the latest artificial intelligence (AI) tools. "Nearly 75% of Google Cloud customers have used our vertically optimized AI, from chips, to models, to AI platforms, and enterprise AI agents," CEO Sundar Pichai said on the Q4 2025 earnings call. All this spending can make investors nervous The company's capital expenditures (capex) totaled $91 billion last year. This was up considerably from $53 billion in 2024. Alphabet is not letting up. It plans to have capex of between $175 billion and $180 billion this year. The business wants to keep building the necessary computing infrastructure to satisfy Google Cloud's AI-related demand, and develop AI capabilities for its widely adopted user-facing apps and for advertising customers. Investors are certainly jittery about all this spending, even though Pichai and his leadership team believe the capital outlays are necessary to stay ahead of the curve. The return on investment is a big question mark. Time will tell if the huge capex is a waste of money or the right financial decision. ExpandNASDAQ: GOOGLAlphabetToday's Change(1.50%) $4.62Current Price$312.00Key Data PointsMarket Cap$3.8TDay's Range$303.80 - $312.3352wk Range$140.53 - $349.00Volume6.7KAvg Vol34MGross Margin59.68%Dividend Yield0.27% Earnings and valuation can be the return driver Investors should consider two key variables. The first part of the equation is the trajectory of profits. Alphabet's earnings per share (EPS) are projected to increase at a compound annual rate of 12.7% between 2025 and 2028. I believe there will be many years of double-digit gains in the future. Investors should also pay attention to valuation. Right now, this stock trades at a price-to-earnings (P/E) ratio of 28.5. Looking out five years from now, it's not unreasonable to think that Alphabet shares can command a P/E multiple of 30, especially since this is one of the most dominant companies out there. The valuation tailwind adds an estimated 5% upside, perhaps higher if the market becomes more bullish. Taken together, the potential for EPS growth and the starting P/E ratio create the perfect recipe for this to be a winning investment.Read NextMar 1, 2026 •By Johnny RiceThe 2 Best Quantum Computing Stocks to Buy in MarchMar 1, 2026 •By Robert Izquierdo2 Top Artificial Intelligence Stocks to Buy Right NowFeb 27, 2026 •By Keithen DruryHere's What 5 Genius AI Stocks Billionaire David Tepper Is BuyingFeb 27, 2026 •By Geoffrey SeilerWall Street's Secret Weapon: This Artificial Intelligence (AI) Stock for 2026Feb 26, 2026 •By Chris Neiger1 Top Quantum Computing Stock to Buy in 2026Feb 25, 2026 •By Daniel SparksUp More Than 70% in 12 Months, Is It Too Late to Buy Alphabet Stock?About the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelStocks MentionedAlphabetNASDAQ: GOOGL$312.00(+1.50%)+$4.62AlphabetNASDAQ: GOOG$311.43(+1.39%)+$4.28*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.