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Alphabet Inc. (NASDAQ: GOOG, GOOGL) has emerged as the least favored among Wall Street’s “Magnificent Seven” stocks, currently trading at the lowest price-to-earnings (P/E) ratio among major tech companies at 18.9. Despite concerns over competition in the artificial intelligence (AI) space, Alphabet reported a 14% year-over-year revenue growth, amounting to $90.2 billion in the last quarter.
In the past year, Alphabet’s total revenue reached $360 billion, a 117% increase over five years, bolstered by its diverse revenue streams including Google Cloud, which is growing at 28% year over year. This division, now contributing $2.2 billion in operating income, is a critical component of Alphabet’s growth strategy, with expectations for revenue to approach $100 billion annually.
Alphabet’s peers, like Meta Platforms (P/E of 26.7) and Microsoft (P/E of 36), are trading at significantly higher valuations despite Alphabet’s comparable growth. The company’s approach to returning capital through dividends and share buybacks further positions it favorably as a potential investment opportunity.
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