| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 32 | 16.8x | 18.2x | Bottom tier | |
Growth | 79 | 20.1% | 7.1% | Top tier | |
Quality | 80 | 15.9% | 4.5% | Top tier | |
Safety | 89 | — | 2.6x | Top tier | |
Capital Return | 19 | 0.25% | 2.10% | Bottom tier | |
Momentum | 69 | 53.3% | 2.9% | Top tier | |
Sentiment | 92 | 34 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Alphabet Inc. is the parent company of Google's businesses and generates most of its revenue from Google Services, which includes Search advertising, YouTube, and the advertising network, alongside YouTube Music and Premium subscriptions, Google One services, platforms, and devices. In Q2 FY2026, Google Services revenue was approximately $94.5 billion out of a total of $119.8 billion, including $63.3 billion from Search and other revenue, $11.1 billion from YouTube advertising, and $12.9 billion from subscriptions, platforms, and devices. Google Cloud also generated $24.8 billion in revenue from cloud infrastructure, AI solutions, enterprise products, and TPU system sales, while Other Bets recorded limited revenue of $382 million.
In Q2 FY2026, Alphabet's revenue increased 24% year over year to $119.8 billion, and gross profit reached $73.9 billion, with a gross margin of approximately 61.7%. Operating income increased 30% to $40.8 billion, and the operating margin reached 34%, while net income was $112.2 billion and earnings per share were $9.11. However, net income does not reflect operating performance alone, as the results included approximately $98 billion in other income and expenses, driven primarily by unrealized gains in the securities portfolio, including $94.1 billion related to the SpaceX investment, according to August 20, 2026 news reports.
Growth was broad but uneven across segments in Q2 FY2026; Search and other revenue grew 17%, YouTube advertising grew 13%, and total Google Services grew 15%, compared with 82% growth for Google Cloud. Cloud operating income increased to $8.8 billion, more than three times its level a year earlier, and its margin improved from 20.7% to 35.6%. In contrast, Other Bets recorded an operating loss of $1.8 billion, while Alphabet-level activities posted a loss of approximately $5.8 billion due to shared AI research and development expenses.
The analyst consensus is Buy, with an average price target of $430.17, within a wide range of $350 to $515; the average is approximately 6.4% above the 52-week range high of $404.47, while the highest target is approximately 27.3% above it. The data does not provide a reliable price-to-earnings ratio, and Q2 FY2026 earnings were inflated by substantial unrealized gains, so valuation should be tied to operating earnings and cash flow rather than net income alone. The wide 52-week range between $206.39 and $404.47, alongside the variation in analyst targets, reflects high sensitivity to balancing cloud and AI growth against capital expenditure and pressure on free cash flow.
Figures in the text are as of 2026-08-26; the live price is shown at the top of the page.
Search and cloud led growth in Q2 FY2026, as Search and other revenue increased 17% to $63.3 billion, while Google Cloud revenue jumped 82% to $24.8 billion. YouTube advertising also grew 13% to $11.1 billion, and subscriptions, platforms, and devices revenue increased 15% to $12.9 billion, supported by YouTube Music and Premium and Google One. Alphabet's consolidated revenue reached $119.8 billion, representing annual growth of 24%.
Alphabet's net income was approximately $112.2 billion and earnings per share were $9.11 in Q2 FY2026, but both figures benefited substantially from unrealized gains in the equity portfolio. Other income and expenses totaled approximately $98 billion, and August 20, 2026 news reports indicated an unrealized gain of $94.1 billion from the SpaceX investment. The operating measure was less inflated, with operating income of $40.8 billion, up 30%, and an operating margin of 34%.
Management raised its FY2026 capital expenditure guidance to a range of $195 to $205 billion, compared with the previous estimate of $180–190 billion, to accelerate the delivery of capacity required for AI demand. Capital expenditure reached $44.9 billion in Q2 FY2026, with the vast majority allocated to technical infrastructure, divided approximately 60% toward servers and 40% toward data centers and networking equipment. This resulted in negative free cash flow of $5.9 billion during the quarter, despite generating operating cash flow of $39.1 billion.
Automated analysis for informational purposes only — not investment advice.
Google Cloud generated revenue of $24.8 billion in Q2 FY2026, representing annual growth of 82%, while its operating income increased to $8.8 billion. The segment's operating margin improved from 20.7% a year earlier to 35.6%, while backlog reached $514 billion after a quarterly increase exceeding $50 billion. Management expects to recognize slightly more than 50% of this backlog as revenue within 24 months, with the majority of revenue from existing TPU system agreements to be realized in FY2027.
Q2 FY2026 results showed that the integration of Gemini coincided with 17% growth in Search and other revenue to $63.3 billion and AI Mode reaching more than 1 billion monthly active users. Management said AI features increase total Search queries, and that AI Max or PMax delivered advertisers an average 15% increase in conversions or value at a similar return on advertising spend. However, competition remains a risk, as management acknowledged during the July 22, 2026 call the need to improve coding and coding agent capabilities, while computing capacity constraints persist.
The clearest financial risk comes from free cash flow turning negative at $5.9 billion in Q2 FY2026, alongside the increase in capital expenditure guidance to $195–205 billion. Management also expects near-term pressure on Google Cloud's margin due to the use of third-party computing capacity, in addition to higher depreciation and energy costs. Other risks include revenue concentration in Google Services, competition in AI models, and approximately 3,000 lawsuits related to platform addiction allegations, according to August 11, 2026 news reports.
