| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 127.40 | -55 |
| Intrinsic value (DCF) | 142.90 | -50 |
| Graham-Dodd Method | 48.00 | -83 |
| Graham Formula | 150.10 | -47 |
Alphabet Inc. (ABEA.DE), the parent company of Google, is a global leader in internet content and information, operating under the Communication Services sector. Headquartered in Mountain View, California, Alphabet dominates the digital landscape through its three core segments: Google Services, Google Cloud, and Other Bets. Google Services, the largest revenue driver, includes flagship products like Google Search, YouTube, Android, and Google Ads, alongside hardware such as Pixel phones and Fitbit wearables. Google Cloud provides enterprise-grade cloud computing and collaboration tools, competing with major players like AWS and Microsoft Azure. Other Bets focuses on innovative ventures in health tech and internet services. With a market cap exceeding €1.75 trillion, Alphabet leverages its vast ecosystem, data-driven advertising dominance, and continuous innovation to maintain its industry leadership. Its diversified revenue streams, strong cash flow, and global reach make it a cornerstone of the tech industry.
Alphabet Inc. presents a compelling investment case due to its dominant position in digital advertising, robust cloud growth, and diversified innovation pipeline. With FY revenue of €350 billion and net income of €100 billion, the company demonstrates strong profitability and cash flow generation (€125.3 billion operating cash flow). Its Google Services segment remains a cash cow, while Google Cloud is rapidly expanding, offsetting slower growth in Other Bets. Risks include regulatory scrutiny in the EU and US, reliance on ad revenue (subject to economic cycles), and intense cloud competition. However, Alphabet's €23.5 billion cash reserves, manageable debt (€25.5 billion), and consistent EPS (€8.04 diluted) underscore financial resilience. The modest dividend (€0.73/share) signals a focus on reinvestment, appealing to growth-oriented investors. Trading on XETRA with a beta of 1.01, it offers stability with tech sector upside.
Alphabet's competitive advantage stems from its unparalleled ecosystem integration, data moat, and scale. Google Search and YouTube command ~90% and ~70% global market shares, respectively, creating an advertising duopoly with Meta. Its AI leadership (e.g., Gemini, DeepMind) and Android's 71% mobile OS share reinforce this dominance. Google Cloud, though third behind AWS and Azure, differentiates via AI/ML integrations and Google Workspace's productivity suite. Other Bets, while loss-making, incubate disruptive technologies (e.g., Waymo, Verily). Competitors struggle to match Alphabet's vertical integration—combining hardware (Pixel), software (Android), and services (Google Ads). However, regulatory pressures (EU Digital Markets Act, US antitrust cases) and privacy-centric shifts (e.g., Apple's ATT) pose threats. In cloud, AWS's enterprise depth and Azure's hybrid solutions challenge Google Cloud's late-mover position. Alphabet counters with cost-efficient AI infrastructure and open-source tools (TensorFlow). Its R&D spend (€40B+ annually) ensures sustained innovation, but monetizing moonshot projects remains a hurdle compared to rivals' tighter focus.