Alphabet’s Fortune: A Reckoning

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Now, listen here. Alphabet, that grand contraption of a company—they’re fixin’ to tell us how they fared in the last quarter come February the fourth. Shares have been climbin’ like a squirrel up a greased pole—nearly 70 percent in a year, they say. But the question ain’t whether they’ve been climbin’, but whether they’re worth the bother of hitchin’ your wagon to ’em at this height. Seems to me, folks are gettin’ mighty enthusiastic about these newfangled technologies, and enthusiasm, bless its heart, ain’t always a sign of good sense.

The Search for Certainty

There was a time, not so long ago, when folks feared these artificial intelligences would up and steal the bread from Google’s search engine. A right silly notion, when you think on it. Turns out, folks are just as happy askin’ a machine as they are askin’ a feller with a bit of book learnin’. Google’s search revenue, it seems, is still flowin’ like the Mississippi – up near 15 percent to around $56.6 billion last quarter. These AI “Overviews” and “Modes” are keepin’ folks clickin’ and lookin’, especially the younger generation who seem to think every answer can be found with a few taps on a screen. They even got over 75 million folks usin’ this conversational searchin’ gadget daily. A marvel, I tell ya, though I reckon a good library card is still a better investment.

And they’re tryin’ to sell this AI to advertisers, helpin’ ’em find just the right feller to show their wares to. It’s a bit like a matchmaker, but instead of hearts, they’re matchin’ wallets. A clever scheme, if I do say so myself.

Gemini and the Apple of Discord

Now, this Gemini contraption of theirs – a fancy name for a thinkin’ machine – they’re tryin’ to squeeze every penny out of it. It’s already embedded in their Workspace and Cloud, and now Apple, bless their polished fruit, is payin’ ’em to use it in their Siri. A multi-year deal, no less. That’s a heap of money comin’ from over two billion devices. It’s a fine thing, this collaboration, but it reminds me of two foxes sharin’ a hen house. There’s bound to be a squabble over the scraps eventually.

Clouds and Streams: A Rising Tide?

Google Cloud, they say, is growin’ like a weed – up 34 percent to $15.2 billion. And they got a backlog of orders reachin’ $155 billion. That’s a mountain of promises, and promises, as any seasoned gambler knows, ain’t always worth the paper they’re written on. Morgan Stanley, those fellers who know a thing or two about money, reckon it’ll be around $58 billion this year. They’re predictin’ even more growth next year, but predictions, like weather forecasts, are subject to change.

YouTube, that stream of moving pictures, is still king of the hill when it comes to watchin’ time. They’ve partnered with the BBC, bringin’ more content to their platform. And they even showed a football game, attractin’ over 19 million viewers. They make money from ads and subscriptions, a clever combination, though I suspect folks are gettin’ tired of bein’ advertised to while tryin’ to enjoy a bit of entertainment.

They got a strong balance sheet too, with nearly $98.5 billion in cash. That’s enough to buy a small country, or at least a mighty fine collection of railroads.

The Fine Print and the Gathering Storm

Now, hold your horses. Investin’ in Alphabet ain’t all sunshine and roses. They’re facin’ legal troubles, with a judge sayin’ they gotta answer to a lawsuit about monopolizin’ the search market. That’s a right mess, and messes cost money.

They’re plannin’ to spend between $91 and $93 billion on capital investment. That’s a heap of money, and while it’s good to invest in the future, it could squeeze their cash flow if this AI business doesn’t pan out. It’s like buildin’ a magnificent palace on a shaky foundation.

The stock is tradin’ at 30 times forward earnings. That’s steep, folks, mighty steep. But with all this growth in search, cloud, and video, they might just be able to justify it. It ain’t an exceptional entry point, mind you, but a small stake might be worth considerin’. There’s a good chance this earnings report will be strong, and the stock could climb a bit higher. But remember, the higher it climbs, the further it has to fall.

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2026-02-02 11:32