Alphabet GOOGL shares are overvalued, as suggested by a Value Score of D. The GOOGL stock is trading at a forward 12-month price/earnings (P/E) of 25.55X compared with the broader Zacks Computer & Technology sector’s 23.78X.
Alphabet shares are trading at a premium compared with Microsoft MSFT, shares of which are trading at a P/E multiple of 21.95. However, GOOGL shares are trading at a lower multiple compared with Apple’s AAPL 28.68 and Amazon’s AMZN 26.15.
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Is Alphabet worth buying at current prices? Let’s dig deep to find out.
Google continues to dominate the Search business with a roughly 89.98% share, followed by Microsoft’s Bing, with a 5.01% share, per the latest data from StatCounter. The company has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. The company shipped more than 250 product launches within AI Mode and AI Overviews in the fourth quarter of 2025, and the company integrated Gemini 3 directly into AI Mode in Search.
Upgradation of AI Overviews to Gemini 3 is offering users a best-in-class AI response at the top of the search results page. GOOGL has made the transition from an AI overview to a conversation in AI Mode completely seamless. This is driving up user experience as well as engagement. In the United States, Alphabet saw daily AI Mode queries per user double since launch, and AI Overviews continue to perform very well. Queries in AI Mode are three times longer than traditional searches. The company is also seeing sessions becoming more conversational, with a significant portion of queries in AI Mode now leading to a follow-up question. Circle to Search is also now available on over 580 million Android devices.
Google Cloud is benefiting from strong Gen AI adoption due to leading models, including Gemini, Imagen, Veo, Chirp and Lyria. Per CRN that cited Synergy Research Group data for the fourth quarter of 2025, Amazon cloud arm AWS, Microsoft and Google Cloud achieved 68% share – roughly two-thirds – of total enterprise spending on cloud infrastructure services. Google Cloud’s market share increased globally while Amazon’s dropped. The addition of Wiz to Google Cloud boosts Alphabet’s security footprint.
Google Cloud’s expanding enterprise clientele has been a key catalyst. More than 120,000 enterprises use Gemini, including AI companies like Lovable and Open Evidence and global enterprises like Airbus and Honeywell. Moreover, 95% of the top 20 and over 80% of the top 100 SaaS companies use Gemini, including Salesforce and Shopify. Alphabet’s expanding AI infrastructure is helping it win enterprise clients. GCP’s prospects remain robust, driven by strong demand for enterprise AI infrastructure, including TPUs and GPUs, enterprise AI solutions driven by demand for the latest Gemini and other AI models, and other services, including cybersecurity and data analytics.
