Alphabet(GOOG) ZACKS·2025-04-25 18:05Core Insights - Alphabet (GOOGL) is viewed as a compelling investment opportunity in large-cap tech, with a disconnect between market perception and performance creating a favorable environment for long-term investors [1][11] Financial Performance - Alphabet reported Q1 2025 earnings with revenue increasing by 12% year-over-year to 34.5 billion (50.7 billion and a 28% rise in Google Cloud revenue to 0.21 per share and authorized a 17.2 billion in Q1 as part of a planned $75 billion investment in AI infrastructure for the year [3] Valuation and Market Position - Alphabet shares are trading at 18.3x forward earnings, below the S&P 500 average and the company's own 10-year median of 25.8x, making it the only stock among the Magnificent 7 trading under 20x forward earnings [4] - The disconnect between performance and valuation suggests that the market may be overly focused on competitive risks while overlooking Alphabet's dominance in search and the long-term potential of its autonomous driving unit, Waymo [5] Technical Analysis - Recent price action indicates that Alphabet stock may have reached a long-term bottom, with strong buying interest and support at prior highs from 2021 [8] - A significant bullish reversal pattern has formed, suggesting potential bottoming behavior, making current levels attractive for investors [9] Long-term Outlook - Alphabet's fundamentals, discounted valuation, and favorable technical setup position it as a compelling opportunity in the market, despite regulatory concerns [11][12] - The company's core business in Search continues to dominate, and its advancements in Google Cloud and Waymo indicate a strong future trajectory [14][15]