Alphabet Continues to Defy Skeptics as Search Revenue Jumps. Is It Time to Buy the Stock While It's Still On Sale?

Core Viewpoint - Alphabet's financial performance in Q1 demonstrates the resilience of its Google search business and highlights significant growth in its cloud computing and other segments, countering narratives of decline in its core operations [2][8][12]. Google Search Performance - Google search revenue increased by 10% to $50.7 billion, with notable strength in sectors such as insurance, retail, healthcare, and travel [2]. - The introduction of multimodality features has driven search queries, with circle-to-search usage rising by 40$12.3 billion, with operating income increasing by 142% to $2.2 billion [4]. - The Google Cloud Platform (GCP) is growing faster than the overall cloud business, focusing on AI infrastructure and generative AI solutions [4]. - Alphabet plans to invest$75 billion in capital expenditures to expand data center capacity, addressing current capacity constraints [5]. YouTube and Subscription Services - YouTube ad revenue rose by 10% to $8.9 billion, contributing to a 19$10.4 billion [6]. - YouTube has maintained its position as the No. 1 streaming service in the U.S. by watch time for the past two years [6]. Waymo Business Expansion - Waymo's robotaxi service is now delivering 250,000 paid trips per week, a fivefold increase from the previous year, with plans to expand to Atlanta, Miami, and Washington, D.C. [7]. Overall Financial Performance - Alphabet's total quarterly revenue grew by 12% (14% on a constant currency basis) to $90.2 billion, with earnings per share increasing by 49$2.81, surpassing analyst expectations [8]. - The company repurchased $15.1 billion in shares in Q1 and announced a new$70 billion buyback plan [10]. Future Outlook - Alphabet anticipates a slight headwind in its ad business due to changes affecting Asian retailers, but remains confident in its ability to navigate macroeconomic challenges [9]. - The company is positioned favorably in the AI space, with its Gemini model and advancements in text-to-video technology [14]. - Alphabet's stock is considered undervalued, trading at a forward P/E ratio of about 18 times 2025 analyst estimates, indicating potential for long-term investment [14].