Alphabet (GOOGL) continued its streak of robust growth with annual earnings expanding 17.5% over the past five years and accelerating to 31.8% in the most recent year. Profit margins improved to 32.2% from 27.7% a year ago, while forecasts call for annual revenue growth of 11.1%, topping the US market average. Investors eye the company’s enviable profit growth and expanding margins, though shares trade above estimated fair value and at a price-to-earnings ratio higher than the industry average but below key competitors.
See our full analysis for Alphabet.
Next, we’ll see how the latest results measure up against the community’s long-running narratives. Some assumptions might get a boost while others could be put to the test.
See what the community is saying about Alphabet
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Alphabet’s projected capital expenditures are set to reach $85 billion in 2025, a substantial commitment that will directly impact net margins and amplify depreciation and infrastructure expenses in the coming years.
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Analysts’ consensus view highlights that this major outlay, which is aimed at sustaining growth in AI and cloud infrastructure, introduces a risk that profit margins could shrink from 31.1% today to 28.9% over the next three years.
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A gap will emerge if revenue growth does not keep pace with rising costs, intensifying scrutiny on whether Alphabet’s core businesses can deliver enough top-line acceleration.
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Catalyst investments in AI and Cloud carry potential for long-term payoff, but near-term margin compression presents a material tension with the consensus optimism on sustained earnings expansion.
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Consensus narrative argues that Alphabet’s margin trajectory will remain under pressure, challenging the more bullish assumption that productivity gains alone can offset heavy spending. This tension keeps the market focused on future profitability signals.
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Results like surging capital expenditures offer both opportunity and risk. See what the consensus thinks drives Alphabet’s future with the full narrative. 📊 Read the full Alphabet Consensus Narrative.
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Google Cloud’s deal backlog jumped 38% year-over-year, reflecting robust demand for AI-powered infrastructure despite tough competition, and new YouTube subscription offerings have further diversified Alphabet’s mix of revenue streams beyond advertising.
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Consensus narrative argues this growing share of revenue outside of ads provides stronger margin support and new long-term growth levers.
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Expansions into premium content and global internet penetration have increased total addressable markets, especially in regions like Asia-Pacific and Latin America.
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Sustained investment in custom AI hardware and software aims to lock in operating leverage, securing higher future margin potential even as costs climb.
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