Alphabet Inc. (GOOGL): A Bull Case Theory

We came across a bullish thesis on Alphabet Inc. (GOOGL) on Substack by FluentInQuality. In this article, we will summarize the bulls’ thesis on GOOGL. Alphabet Inc. (GOOGL)'s share was trading at $158.46 as of May 12^th. GOOGL’s trailing and forward P/E were 17.69 and 16.86 respectively according to Yahoo Finance.

Despite the current high levels of market greed—reflected by a Fear and Greed Index score of 63—there remain asymmetric opportunities where being “greedy like the rest” could yield substantial rewards. Alphabet (GOOGL) exemplifies one such opportunity. Often misunderstood as merely a search engine, Alphabet’s real power lies in its integrated control over digital distribution, infrastructure, and data. Rather than just competing for traffic, Alphabet owns the digital roads—through dominance in Search, Android, YouTube, Chrome, Gmail, and Maps—all of which create a powerful feedback loop of user data and engagement. Search continues to be Alphabet’s cash cow, boasting 80%+ gross margins, while YouTube monetizes both attention and intent, reaching 2.7 billion users monthly. Google Cloud, once a laggard, has turned profitable and is growing faster than Microsoft Azure in several verticals. Importantly, AI isn’t a recent addition to Alphabet’s strategy—it’s foundational. DeepMind has been a pioneer in AI for years, and Gemini is now being embedded across Google Search, Workspace, and Android, leveraging Alphabet’s massive user base without needing to acquire customers. This inherent distribution advantage is one of Alphabet’s strongest assets in the AI race. Meanwhile, YouTube is evolving into a multi-purpose platform integrating shoppable video, live sports, and streaming bundles. Google Cloud is expanding into AI and cybersecurity, and Waymo continues to innovate in autonomous driving. With $100B+ in cash on hand, Alphabet has the flexibility to invest in R&D, execute buybacks, or pursue strategic acquisitions without constraints. Its diversified portfolio not only ensures steady profitability but also offers significant optionality in emerging tech sectors. Alphabet isn’t reacting to AI—it’s been laying the groundwork for over a decade, positioning itself as the backbone of both the internet and the AI-powered future. Still dominant, still evolving, and, remarkably, still undervalued.

Alphabet Inc. (GOOGL) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 234 hedge fund portfolios held GOOGL at the end of the fourth quarter which was 202 in the previous quarter. While we acknowledge the risk and potential of GOOGL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.