Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.

Alphabet appears to be a high-quality business with very strong profitability and a large liquidity buffer, but the market is already pricing in a notably high level of expectations. Revenue has been growing in recent periods, and along with it gross profit, EBITDA, operating profit, and net income have all increased, confirming the resilience of the core model. Profit margins remain very high: net margin is around 37.9%, operating margin around 32.7%, and gross margin around 60.4%, which indicates strong pricing power and cost efficiency. ROE, ROA, and ROI are at outstanding levels and also improve the company’s investment profile. At the same time, debt-to-equity is low, the current ratio is comfortable, and cash on hand is very large, which reduces financial risk and provides flexibility for investments and buybacks. The weak point is that the quick ratio is zero, but for Alphabet this is more a feature of its working capital structure than a sign of stress, so this factor should be interpreted cautiously. The main limiting factor for valuation is the multiples: P/E, P/S, P/B, and especially P/FCF are significantly above the industry median, meaning the market is paying a premium for quality and scale. Such a premium is justified by the strong metrics, but it limits the potential for further re-rating without faster growth. Dividend yield is practically nonexistent, so the investment case is not built on current shareholder cash flow, but on business growth and buybacks. Growth in assets, equity, and earnings supports fundamental value, although the increase in long-term debt and liabilities requires attention, even though the leverage level remains moderate for now. Overall, the fundamentals support the current valuation more than they call for a meaningful increase, so any adjustment should be small and conservative.

Alphabet Inc.

Слабый индекс, значительно упал. Быки продолжают терять уверенность.

Weak index, significantly down. Bulls continue to lose confidence.

Сильный индекс, без изменений. Медведи в растерянности.

Strong index, flat. The bears are confused.

Слабый индекс, значительно вырос. Нейтральный рынок.

Weak index, significantly up. Neutral market.

Слабый индекс, незначительно упал. Нейтральный рынок.

Weak index, slightly down. Neutral market.

Сильный индекс, значительно вырос. Приток средств в лонги на высоком уровне.

Strong index, significantly up. Inflow of funds into longs at a high level.

Alphabet remains a highly profitable and financially resilient business, but premium valuation multiples and a weak dividend track record limit its re-rating potential.

Key Points
Microsoft reported better-than-expected earnings on Wednesday after market close.
The company's Azure cloud platform saw massive revenue growth, similar to its rivals AWS and Google Cloud.
The company also kept its capex forecast unchanged, which caused its stock to rise in after-hours trading.
After the market closed on Wednesday, tech giant and AI hyperscaler Microsoft (NASDAQ:MSFT) reported better-than-expected Q4 2026 earnings for the period ending June 30.
Revenue and operating income were both up 18% year-over-year (YoY) to $90 billion and $40.6 billion, respectively. Revenue beat the consensus expectation of $87.6 billion.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Given this impressive performance, is Microsoft’s stock a buy?
Image source: Getty Images.
A big beat with a small asterisk
Although revenue and operating income both rose, it was the marquee earnings per share (EPS) number that really smashed expectations, coming in at an adjusted $4.74/share, compared to the consensus of $4.24/share, a 31% improvement over the prior-year quarter.
However, $0.27/share of those earnings was attributable to special items, including a $3.2 billion gain from the company’s investment in the AI company Anthropic. Still, even if we strip out those items, Microsoft’s EPS would be $4.47/share, up 15.8% YoY and still beating the consensus.
In general, as Microsoft CFO Amy Hood put it, it was “a strong quarter to close out the fiscal year.”
But there were a few particularly noteworthy items that deserve special attention from investors.
Cloud comes in clutch
Microsoft’s cloud computing platform Azure has long been the second-most-used cloud computing platform in the world, behind Amazon’s (NASDAQ:AMZN) AWS but ahead of Alphabet’s (NASDAQ:GOOGL) Google Cloud Services. In recent quarters, Google Cloud Services has seen explosive growth in both revenue and profits, which the company attributes to its implementation of AI. AWS has also reported higher top- and bottom-line growth among users using its AI features.
That trend applied to Microsoft as well, with revenue from Azure and other cloud services increasing 43% YoY. Although Microsoft didn’t break out the actual dollar amount, the overall Intelligent Cloud segment, which includes Azure, saw revenue increase 32% to $39.3 billion.
Holding the line on spending
Shares of Microsoft rival Alphabet took a hit after its recent Q2earnings call in which it increased its capital expenditures (capex) forecast for the year, largely due to increased spending on AI infrastructure. The Google parent’s capex was already up significantly from the prior year, and investors were starting to question whether the ultimate payoff would justify the massive upfront expense.
Meta Platforms (NASDAQ:META) encountered a similar situation as it narrowed its 2026 capex guidance toward the higher end of its previously announced range, causing its shares to take a post-earnings hit as well.
But Microsoft bucked the trend. True, its quarterly capex of $35.8 billion was more than double the year-ago quarter’s capex of $17.1 billion. But the company announced it was keeping its forecast for total calendar year 2026 capex unchanged at $175 billion following an accounting change. Investors rewarded the stock by sending shares up 8% in after-hours trading.
Even with that 8% increase, Microsoft shares are still down more than 15% over the past year, underperforming the S&P 500 and cloud rivals Alphabet and Amazon. Meanwhile, its forward price-to-earnings ratio has dropped from 30 to a more reasonable 20.
With Azure showing impressive revenue growth and management keeping a lid on AI spending (at least for now), Microsoft looks like a buy.
Should you buy stock in Microsoft right now?
Before you buy stock in Microsoft, consider this:
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John Bromels has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is Microsoft a Buy After Its Latest Earnings Report?

Key Points
SpaceX's Starship rocket recently completed its 13th test flight.
It achieved most of its goals and launched new versions of Starlink satellites into space.
But shareholders weren't enthused, as SpaceX's AI spending remains the focus of the company's rising costs.
Space Exploration Technologies (NASDAQ: SPCX) recently completed the 13th test flight of its large Starship rocket, and by the company's own accounts, it was mostly successful. Even with the rocket completing many of its objectives -- including a soft splashdown in the Indian Ocean and the release of Starlink satellites -- investors weren't wowed.
In the first trading session following the launch, SpaceX stock was down by more than 4%.
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So, why aren't shareholders pleased with the results? It's likely because SpaceX is spending billions of dollars to build its artificial intelligence infrastructure -- and they're worried it won't pay off.
Why a successful launch isn't enough for investors
Starship is an important part of SpaceX's future because the world's largest rocket could help the company eventually reduce the cost of reaching orbit by 99% compared to the historical average launch cost.
Starship will be used to launch payloads into space for customers and, as the test flight showed, send more Starlink satellites into space. Starlink is critical to SpaceX's growth, as the satellite internet service is SpaceX's biggest revenue driver. Starlink sales were about $3.2 billion in Q1 2026.
But some shareholders likely looked past the successful Starship test because SpaceX is more than just a rocket company, and its spending on its artificial intelligence projects is sky-high.
In the first quarter, 76% of SpaceX's $10 billion in capital expenditure (capex) was allocated to its AI programs, primarily for data center infrastructure. Not only is that a large percentage of total spending, but overall capex spending is accelerating at the company.
In 2025, SpaceX's total capex was $20.7 billion, meaning that in the first quarter of this year, the company had already spent about half of all of last year's total.
Investors are increasingly skeptical that the billions of dollars being spent on AI infrastructure will ultimately pay off for SpaceX and other tech companies. Profits from massive AI spending have been hard to come by, and it's erasing much of the free cash flow that large tech companies are used to generating.
One recent example is Alphabet, whose share price has fallen as investors focused on the fact that its free cash flow was negative $5.9 billion in the first quarter -- its first negative free cash flow since going public in 2004.
SpaceX is worse off because, unlike Alphabet, the company isn't profitable. And investors are skeptical that it'll be profitable any time soon with all its AI spending underway.
It's not the time to buy SpaceX yet
Potential SpaceX investors aren't wrong to be skeptical of SpaceX's spending, and current shareholders are right to be concerned.
The company shows no signs of slowing down its AI investments, and another Musk-led company, Tesla, just reported negative free cash flow for the first time in more than two years. Investors punished Tesla's shares for the decline.
Rockets, satellite internet, and AI business aren't cheap, of course, but I don't think investors are going to give up their aversion to AI overspending any time soon. As long as the spending is high and profits are low, it's likely SpaceX's stock could struggle to gain traction.
What's more, SpaceX shares already trade at a premium. The stock's price-to-sales (P/S) ratio is about 77 right now, compared to the tech sector average P/S ratio of 7.
Owning some AI stocks can be a smart move, but investors may want to focus on more profitable companies right now. The AI spending boom isn't slowing down any time soon, but that doesn't mean shareholders have to own shares of an AI company that's miles away from profitability and spending too much on AI bets that may not pay off.
Should you buy stock in Space Exploration Technologies right now?
Before you buy stock in Space Exploration Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $390,394!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,209,184!*
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*Stock Advisor returns as of July 29, 2026.
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Even a Successful Starship Launch Wasn't Enough to Lift SpaceX Stock. Investors Are Still Worried About This 1 Thing

Key Points
Alphabet grew revenue by 24% year over year in the second quarter, including an 82% increase in cloud services revenue.
There are now 950 million people engaging with the Gemini app every month.
Capital expenditures in the second quarter sent free cash flow into the negative.
Even the most enthusiastic artificial intelligence (AI) bulls seem to be putting on the brakes recently. Investors are starting to realize that more and more money is being poured into AI development, and the results remain to be seen.
Exhibit No. 1 this week is Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). The Google parent company surprised and worried the market when it raised its AI spend outlook for the year to $200 billion at the midpoint for 2026. That jaw-dropping figure sent Alphabet stock plunging, despite what was a fantastic report, to its lowest P/E ratio ever.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
At just over 16 times trailing-12-month earnings, is Alphabet stock too cheap to ignore?
Everything that's going right
When OpenAI first launched ChatGPT nearly four years ago, the market was concerned that Google would lose out as people migrated over to its platform and abandoned Google's search engine. With 90% dominance in search, Google seemed incredibly vulnerable.
However, the company capitalized on its lead by integrating AI into its platform, offering a wide range of options for search users, including quick AI results and AI mode. Not only did ChatGPT not render it obsolete, but Alphabet quickly pivoted and became an AI powerhouse.
Today, hundreds of millions of people worldwide engage with Gemini, the company's large language model (LLM), in many forms, and the second-quarter results were chock-full of great news about its growth. There are now 950 million monthly active users of Gemini, which is a significant percentage of the global population.
Alphabet is launching a torrent of new products, like the recent rollout of Omni video creator, which launched in May and already has a 40% increase in its user base, and Antigravity 2.0, an agentic AI developer, which launched in May and has 2.4 million weekly active users.
These AI upgrades are in addition to the full Alphabet ecosystem, which includes a wide range of top businesses such as Google Search, YouTube, and Android. Total second-quarter revenue was up 24% year over year, including an 82% increase in cloud services revenue. Operating income increased 30%, and operating margin expanded by two percentage points to 34%.
What's going wrong
Alphabet is well-positioned to sustain its growth, but if its main opportunities lie in AI, it needs to invest to stay competitive. That's why it continues to raise its capital expenditure (capex) outlook, in line with most of its peers. It spent nearly $45 billion in the second quarter, double last year's spend, and posted negative free cash flow. Management raised its full-year spend outlook to $195 billion to $205 billion.
The market is losing patience with the ever-increasing capex spend when it's not backed up by available cash. There's a lot at stake, and the results might be a long time in coming; management is guiding for spending to increase further in 2027.
Alphabet is backed up by a range of successful, money-making businesses and is far from an unprofitable AI start-up. The stock is already ticking slightly higher as investors see the bargain here. It may be a slow road to recovery, but long-term investors can scoop up a bargain.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $390,394!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,209,184!*
Now, it’s worth noting Stock Advisor’s total average return is 899% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is Google Parent Company Alphabet Stock Too Cheap to Ignore Right Now?

Key Points
Tesla's sales were strong in the second quarter, and the company topped $100 billion in trailing-12-month revenue for the first time.
The stock tumbled amid shrinking margins, negative cash flow, and rising capex.
Tesla also plans to borrow up to $30 billion this year.
Think you're having a rough summer? At least you haven't lost $300 billion like Tesla (NASDAQ: TSLA) CEO Elon Musk.
Musk made history this year when his other mammoth company, Space Exploration Technologies, went public, pushing Musk's personal wealth to more than $1 trillion. He became the first -- and only -- trillionaire in recorded history.
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But it didn't last. SpaceX stock has fallen below its initial public offering price, and Tesla is hemorrhaging value following the company's second-quarter earnings report. Even though Tesla reported strong revenue -- and posted more than $100 billion in trailing-12-month sales for the first time -- the stock fell by 18% in a single week after July 22 earnings, its worst one-week performance since 2022.
How extensive is Musk's loss? According to the Bloomberg Billionaires Index, his net worth is now $709 billion. Musk lost more money in the last six weeks than anyone else on the list even possesses. (No. 2 on the list is Larry Page, the co-founder of Alphabet, with a net worth of $281 billion.) Musk acknowledged this loss in a social media post on X, simply writing, "(Former) Trillionaire."
Let's see why the market has turned on Tesla stock despite its strong revenue growth.
The red flags surrounding Tesla now
Tesla's primary business is electric vehicles -- the company delivered 480,126 of them in the second quarter, up 25% from a year ago, and that resulted in most of Tesla's $28.23 billion revenue. Tesla said EV sales brought in $20.51 billion, up 23%.
The big problem, however, was Tesla's dwindling margins. Operating margins fell from 4.1% a year ago to just 1.4% in the second quarter of this year. Operating expenses jumped 47%, to $4.35 billion. Tesla reported negative free cash flow of $1.1 billion in the quarter, and its cash and investments dropped by $1.2 billion.
Capital expenditures more than doubled sequentially, according to CFO Vaibhav Taneja, and the company expects them to continue increasing in the second half of the year. Tesla issued guidance for $25 billion in capex spending for the year and announced plans to borrow up to $30 billion.
The market reacts
Undoubtedly, Tesla has huge plans that require enormous investment. Artificial intelligence is essential for Tesla's biggest bets, including self-driving technology and the Optimus robot line. The company is running early versions of its v15 autonomous driving software in robotaxis, but it's unclear when the technology will be ready for nationwide rollout -- or if regulators will sign off on it.
Meanwhile, Tesla is making room for Optimus robot production by discontinuing manufacturing lines at its Fremont, California, factory for Model S and X vehicles. Robots built on that line will be used for further training and development of the hardware and AI software, the company has said, but the technology appears to be a long way from commercial sales.
Tesla has always been priced for perfection, with a high forward price-to-earnings ratio that, even after a drop, still registers at an eye-watering 170. Investors have long been willing to buy and hold Tesla stock based on Musk's vision. But with dwindling margins, negative cash flow, doggedly high spending, and plans to borrow $30 billion, the shine appears to be coming off Tesla stock this summer.
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Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tesla Stock Suffered Its Worst Week Since 2022, Falling 18% as Investors Balked at Elon Musk's Robotaxi and AI Spending Plans

Key Points
Oklo is still building its first Aurora power house.
It's a long way from generating any revenue, let alone profits.
NextEra Energy has visible nuclear-powered earnings growth on the horizon.
Oklo (NYSE: OKLO) got off to a fast start. The small modular nuclear reactor (SMR) developer began trading on the New York Stock Exchange in May 2024 at around $10 per share and rocketed to nearly $175 per share by October 2025. Unfortunately, it has been all downhill from there. Shares currently sit more than 75% below their peak.
While I like a good bargain, I'm still not buying this nuclear energy stock. Here's why and the one I'm buying instead.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Lots of promise, but it hasn't delivered yet
Oklo is developing fast fission power plants that could eventually produce clean, reliable, and affordable energy at scale. It has secured a couple of major customers. In 2024, it formed a landmark strategic relationship with the privately held data center operator Switch to deploy 12 gigawatts (GW) of advanced nuclear power, in one of the largest corporate clean power agreements ever signed. Oklo also signed an agreement with Meta Platforms earlier this year to support 1.2 GW of nuclear energy developments in Ohio. These deals will help the tech companies secure the power they need in the AI age.
However, my issue with Oklo is that it currently isn't producing any power. Oklo is building its first Aurora powerhouse at the Idaho National Laboratory, which won't be operational until late 2027 to early 2028. Meanwhile, it expects to start construction on the first phase of its much larger-scale Aurora powerhouse in Ohio later this year, putting it on track to bring that phase online as early as 2030, with full completion targeted by 2034.
As a result, Oklo isn't generating any revenue yet. Meanwhile, its spending will grow as it advances construction on its Ohio project. That means it's a long way from making money, making it a very risky stock.
A much lower-risk way to cash in on the nuclear resurgence
While Oklo has a lot of promise, it's a long way from delivering results. On the other hand, NextEra Energy (NYSE: NEE) is already ahead of it in capitalizing on the surge in nuclear energy demand. The utility is a leader in clean power, including nuclear. It currently operates seven units across four locations that generate more than 6 GW of reliable, emissions-free power.
Last October, NextEra signed a deal with Alphabet's (NASDAQ: GOOGL)(NASDAQ: GOOG) Google to accelerate nuclear energy deployment in the U.S. As part of that collaboration, NextEra will restart the dormant Duane Arnold Energy Center in Iowa. Google signed a 25-year deal to buy most of the power from that 615-megawatt facility when it resumes operations in the first quarter of 2029. NextEra expects the facility to contribute up to $0.16 per share in annual earnings over its first decade, a meaningful boost for a company that expects to generate $3.63 to $4.00 per share in earnings this year. The companies also expect to explore the development of new nuclear generation in the country.
Already profitable with nuclear-powered growth
Oklo is years away from turning a profit, assuming everything goes according to plan. Contrast that with NextEra Energy, which is already making money. It has visible nuclear-powered growth from Duane Arnold and its pending merger with Dominion, which will make it the country's second-largest producer. That lower risk upside exposure makes it the best nuclear stock to buy.
Should you buy stock in Oklo right now?
Before you buy stock in Oklo, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Oklo wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $390,394!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,209,184!*
Now, it’s worth noting Stock Advisor’s total average return is 899% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Matt DiLallo has positions in Alphabet, Meta Platforms, and NextEra Energy and has the following options: long December 2028 $650 calls on Meta Platforms and short December 2028 $660 calls on Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and NextEra Energy. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Oklo Is Down Over 75% From Its High. It's Still Not the Best Nuclear Stock to Buy.

Alphabet (NASDAQ: GOOGL) has built an AI stack that reaches from custom TPUs and data centers to Gemini, Search, YouTube, and Cloud. This video examines whether that hidden infrastructure can lower costs, strengthen margins, and give the company a durable advantage that Wall Street has not fully recognized.
Stock prices used were the market prices of July 26, 2026. The video was published on July 26, 2026.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $390,394!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,209,184!*
Now, it’s worth noting Stock Advisor’s total average return is 899% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 29, 2026.
Rick Orford has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Real Reason Alphabet Could Win More of the AI Boom

Key Points
Meta's core advertising business is delivering strong growth.
The stock trades at a P/E ratio of just 19.
Meta looks poised to launch a cloud computing business.
Meta Platforms (NASDAQ: META) is due to report earnings after the market closes today, July 29. The stock has been under pressure lately, falling nine sessions in a row, indicating skepticism about the company's capital expenditure plans, which tracks with a sell-off in Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock after that company reported negative free cash flow for the first time ever last week.
However, I think Meta is poised to pop after the earnings report. Here are three reasons why.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
1. The digital advertising market remains strong
Meta earns nearly all of its revenue from advertising. Despite the pearl-clutching over its capex spending and the losses in reality labs, its ad business continues to deliver brisk growth, driving overall revenue up 33% in the first quarter.
Alphabet reported 14% growth in advertising revenue in the second quarter, and a report from media platform Skai said paid social ad spend was up 26% in the same period, a bullish sign for Meta. Meta has been gaining market share on Google for years, and that likely continued in the second quarter. In fact, its ad revenue could soon surpass that from Google Search.
Another round of strong ad growth should help reassure investors, showing that the core business is executing at a high level.
2. The stock is cheap
Meta has historically traded at a low earnings multiple and been undervalued for its growth rate.
However, the stock looks especially cheap now, trading at a price-to-earnings ratio of just 19 after adjusting for one-time tax penalties and benefits, a roughly 30% discount to the S&P 500, which trades at a price-to-earnings ratio of 26.
After the nine-day slide over the last two weeks, the stock looks oversold. It's rare for a company growing revenue by 33%, especially one with Meta's competitive advantages, to be trading at just 19 times earnings.
3. It could announce a cloud computing business
The buzz is building around a Meta cloud computing business. CEO Mark Zuckerberg said weeks ago that offering cloud computing services is "definitely on the table," and that his company receives weekly requests from potential customers.
Following that comment, Bloomberg reported that the company is planning a cloud business to sell AI computing power. Earlier in July, The Wall Street Journal said that Meta was hiring a top executive at Amazon's cloud business, another strong indicator of its cloud ambitions.
Launching a cloud business seems like a no-brainer for the company. Cloud revenue growth is accelerating among its hyperscaler peers, as Google Cloud just reported 82% revenue growth, and a cloud business would give Meta a way to monetize the billions it's spending on AI infrastructure.
Meta has yet to make a formal announcement about its cloud business, but it could come in its Q2 earnings report. Investors are likely to cheer the news.
Should you buy stock in Meta Platforms right now?
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prediction: Meta Stock Will Pop After Q2 Earnings. 3 Reasons Why

Alibaba's BABA weakening cash flow could become a headwind to its long-term growth potential if heavy investments continue to outpace cash generation. The company generated solid revenue growth in fiscal 2026, but its cash generation deteriorated sharply as it accelerated spending on AI infrastructure, cloud capacity, quick commerce and the Qwen AI ecosystem. Operating cash flow declined 53% year over year in fiscal 2026, while free cash flow swung to an outflow of RMB46.6 billion from an inflow of RMB73.9 billion a year earlier. This decline is primarily due to investments in quick commerce, cloud infrastructure and Qwen user acquisition, underscoring that these initiatives remain strategic priorities despite near-term financial pressure.
At the same time, management indicated that AI demand will require an even larger data center footprint over the next five years, implying sustained capital commitments that could keep free cash flow under pressure. Although Alibaba maintains a strong balance sheet, including RMB520.8 billion of cash and other liquid investments, continued negative free cash flow may eventually reduce financial flexibility if investment returns take longer to materialize.
On the positive side, Cloud Intelligence revenues continue to accelerate, supported by robust AI adoption, suggesting these investments could generate meaningful long-term returns. However, investors should closely monitor whether improving cloud monetization and operating efficiencies can offset persistent cash outflows. Until Alibaba demonstrates consistent recovery in ‘free cash flow’ alongside AI-driven revenue growth, cash flow weakness will likely remain a significant negative factor affecting its long-term investment potential.
How Does Alibaba Stack Up Against Its Main Rivals?
Alphabet GOOGL generates substantially stronger operating cash flow than Alibaba, enabling larger AI and cloud investments without compromising financial flexibility. Alphabet produced $39.1 billion in operating cash flow in the second quarter of 2026 while expanding AI infrastructure and strengthening its global monetization engine. Alphabet's diversified Search, YouTube and Cloud businesses provide durable competitive advantages, whereas Alibaba's free cash flow remains under pressure from aggressive AI investment.
Amazon AMZN enjoys a stronger cash flow profile than Alibaba, supporting massive AI infrastructure spending backed by customer commitments and long-term returns. Amazon continues funding AWS, custom chips and logistics expansion while expecting future free cash flow acceleration. Amazon benefits from diversified businesses, scale and enterprise demand.
BABA’s Share Price Performance, Valuation & Estimates
BABA shares have declined 21.4% year to date compared with the industry’s fall of 4.1%.
BABA’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, BABA is currently trading at a price-to-book ratio of 1.7, below the sector’s average of 4.23. The company carries a Value Score of C.
BABA’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 and 2028 EPS has been revised downward over the past 30 and 60 days. The company has also missed earnings expectations in each of the trailing four quarters, with an average negative surprise of 37.65%.
Image Source: Zacks Investment Research
Alibaba currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Will Alibaba's Cash Flow Weakness Hurt Its Long-Term Growth Potential?

Key Points
Tim Cook has successfully guided Apple to become the largest company on the planet.
While Apple has a great business model, its valuation has gotten frothy.
Longtime Apple (NASDAQ: AAPL) CEO Tim Cook will host his finalearnings conference callafter the bell on Thursday, July 30. While Cook was not the same type of innovator as his predecessor, Apple founder and legendary CEO Steve Jobs, he did a great job of nurturing Apple's core strengths. He will leave as Apple is the largest company in the world, with a market cap of $5 trillion. The question, though, is whether the stock is still a buy with him ready to depart.
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Apple has a great business
When Apple reports its fiscal third-quarter results, investors should expect much of the same. iPhone sales should be solid, with the company reportedly seeing a 3% increase in shipments during the quarter and gaining its highest-everglobal marketshare at 20%, according to Centerpoint Research. This should then feed into its high-margin service revenue, which has consistently grown at a mid-teen rate.
Cook leaves Apple as having one of the best business models on the planet, making it easy for its next CEO to get off to a running start. The beauty of Apple is its closed ecosystem, which helps lock in customers. Once someone buys an iPhone, the cost of switching becomes increasingly difficult with each photo taken, subscription bought, and app downloaded. Users then become a part of Apple's huge service revenue machine. Apple is getting a high-margin revenue stream every time someone clicks on a search ad (as it gets a 36% revenue cut from Alphabet's Google), uses Apple Pay, buys cloud storage, or purchases a subscription or app.
Meanwhile, Apple just increased prices for several devices and certain service plans. This should be a nice revenue driver in the coming quarters after Cook leaves, giving incoming CEO John Ternus a solid revenue tailwind as he takes the reins. Ternus will also have time to execute a more comprehensive AI strategy for the company. That said, I wouldn't be surprised if Cook's decision to sit back and not throw huge amounts of money into chasing AI models proves to be a smart one.
Is Apple stock a buy?
While I think Apple is one of the best companies in the world, I would not be buying the stock right now. The stock's valuation has expanded dramatically, and it now has a forward price-to-earnings (P/E) ratio of over 35 times. Its trailing P/E of 41 times is now more than double the multiple it traded at before the pandemic. Meanwhile, it could face some margin pressure from increasing memory prices.
Given that valuation still matters, I'd wait for a better entry point before considering buying the stock.
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Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tim Cook Will Host His Last Earnings Call as Apple CEO on July 30. Is the Stock a Buy Now?

The Dow and the S&P 500 ended higher on Tuesday, driven by robust earnings and a decline in energy prices, as investors continued to dump chip stocks and take refuge in other defensive assets. The Nasdaq ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) jumped 1%, or 537.24 points, to close at 52,747.32 points.
The S&P 500 rose 0.2%, to finish at 7,428.78 points. Health care, communication services, and consumer staples stocks were the biggest gainers, while energy and tech stocks were the worst performers.
The Information Technology Select Sector SPDR (XLK) lost 1.8%, while the Energy Select Sector SPDR (XLE) dropped 1.4%. The Health Care Select Sector SPDR (XLV) gained 2.4%. The Consumer Staples Select Sector SPDR (XLP) added 2%, while the Communication Services Select Sector SPDR (XLC) rose 1.9%. Seven of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq declined 0.2%, to end at 24,876.91 points.
The fear gauge, the CBOE Volatility Index (VIX), was down 2.46% to 18.21. Advancers outnumbered decliners on the S&P 500 by a 2.5-to-1 ratio. A total of 17.2 billion shares were traded on Tuesday, lower than the last 20-session average of 17.4 billion.
On the S&P 500, there were 63 new 52-week highs and one new low.
Robust Earnings Boost Markets, Chip Selloff Continues
The S&P 500 rallied on Tuesday, boosted by gains in The Boeing Company (BA) and The Coca-Cola Company (KO) after the companies reported their quarterly results. Shares of Boeing jumped 4.8% despite the company reporting a wider-than-expected loss in the second quarter of 2026.
Boeing reported a quarterly loss of $0.76 per share, wider than the Zacks Consensus Estimate of a loss of $0.34. However, it posted revenues of $24.56 billion, surpassing the Zacks Consensus Estimate by 2.11%.
The Coca-Cola Company reported second-quarter 2026 earnings of $0.97 per share, beating the Zacks Consensus Estimate of $0.92 per share. The company’s shares ended up 5%.
Dow, which posted its third straight day of gains, got a boost from The Sherwin-Williams Company (SHW). The company’s shares jumped 8.3% after it reported second-quarter 2026 earnings of $3.7 per share, outpacing the Zacks Consensus Estimate of $3.56 per share. The Sherwin-Williams Company has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The earnings season is fast gathering pace, and robust quarterly results from some of the industry bellwethers somewhat offset the bleeding chip stocks. Investors are concerned that companies like Microsoft Corporation (MSFT), Amazon.com, Inc. (AMZN) and Alphabet, Inc. (GOOGL) are investing too much in AI data centers, which could be a risky affair.
Chip stocks continued to suffer on Tuesday, with the PHLX Semiconductor (SOX) declining 4.5%. Investors are now waiting to see the quarterly guidance from tech giants Microsoft, Amazon, Apple, Inc. (AAPL) and Meta Platforms Inc. (META), which will report their quarterly results this week.
Declining oil prices also helped markets, as Iran started talks with Oman and Saudi Arabia regarding the Strait of Hormuz. West Texas Intermediate crude futures dropped nearly 4% to end at $79.26 a barrel. International Brent crude settled at $84.09, declining 4.8%.
Economic Data
The Conference Board reported on Tuesday that consumer confidence fell to 90.8 in July from an upwardly revised 92.2 in the prior month. The reading came sharply lower than the consensus estimate of a rise to 92.3.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CocaCola Company (The) (KO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.