Alphabet Stock: Still a Smart Buy? Top Investor Reveals Surprising Take
Alphabet faces its moment of truth as markets question whether the tech giant still delivers growth.
The Bull Case That Won't Quit
Google's parent company continues dominating search while expanding its AI footprint. Cloud revenue climbs steadily, though not at the blistering pace of earlier years. Advertising margins remain the envy of the industry.
Where Skeptics See Cracks
Regulatory pressures mount on multiple continents. Antitrust lawsuits threaten the core business model. Emerging competitors chip away at market share in key segments.
The Institutional Verdict
One prominent fund manager argues Alphabet trades at a discount to intrinsic value. They point to untapped potential in YouTube monetization and hardware integration. The AI infrastructure play could deliver the next growth surge.
Because nothing says 'smart investment' like betting on a company that knows everything about everyone—except maybe when regulators will finally break out the antitrust hammer.
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Indeed, worries of chatbots replacing the company’s search engines appear to have been cast aside, and Alphabet set a new revenue record while breaking through the $100 billion benchmark for the first time ever in Q3 2025.
It wasn’t just revenues that were expanding, but profits as well. While the $102.3 billion in sales represented a year-over-year increase of 16%, net income ROSE by an even faster clip of 33% to get within striking distance of $35 billion.
That wasn’t the only figure that was increasing, however, as Alphabet’s CapEx for the quarter rose to almost $24 billion, which represented a year-over-year jump of over 80%. As worries of an AI bubble begin to percolate, and after robust growth over the past half year, might now be the time to take some profits?
Not necessarily, says top investor Daniel Sparks, who believes GOOGL remains primed for more upside.
“Alphabet arguably remains a top AI stock to own – even after its massive run-up,” explains the 5-star investor, who ranks among the top 1% of stock pros covered by TipRanks.
Sparks points out that AI is not a threat to Alphabet’s primacy, quite the opposite. In fact, the company’s Core drivers – such as Search and YouTube – are getting better and better due to AI improvements.
“Alphabet’s latest quarter suggests artificial intelligence isn’t a threat to search – it’s fuel,” says Sparks, adding that “AI features appear to be lifting engagement and enhancing overall monetization.”
Google Cloud is another big story that Sparks is eager to highlight. Not only did Google Cloud grow revenues by 34% in Q3, but the company’s “swelling” backlog reflects increasing demand throughout the market.
While Sparks acknowledges the massive AI CapEx, he doesn’t believe this invalidates the investment case. Moreover, he deems GOOGL’s valuation quite “defensible” given the surging revenue growth and AI-powered improvements.
“Early data suggests AI is creating new opportunities while preserving monetization and even accelerating some parts of its business,” emphasizes Sparks. (To watch Daniel Sparks’ track record, click here)
Wall Street isn’t ready to look for the exits either. With 28 Buys and 8 Holds, GOOGL enjoys a Strong Buy consensus rating. Its 12-month average price target of $309.15 implies gains in the low double-digits in the coming year. (See)
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