Alphabet shares have gone sideways-to-down for six weeks, sitting roughly 15% below their 52-week high of $408.37. The operating results tell a completely different story than the stock price does.

Wasn’t Search supposed to be dying by now? Search revenue grew 19% last quarter, extending an eleven-quarter streak of double-digit growth and quietly refuting the two-year-old thesis that chatbots would gut Google’s core business. Total revenue reached $109.9 billion, up 22% year-over-year, the fastest pace since 2022. Google Cloud crossed $20 billion in a single quarter for the first time, growing 63%, with its contracted backlog nearly doubling sequentially to more than $460 billion.

So why is the stock stuck? Because that growth comes with a bill. Alphabet raised its 2026 capital expenditure guidance to $180-190 billion and confirmed 2027 will be higher still. To help fund it, the company raised roughly $85 billion in equity in June, the largest single raise in U.S. corporate history, including a $40 billion at-the-market program and a $10 billion private placement to Berkshire Hathaway. First-quarter free cash flow was just $10.1 billion against $35.7 billion of capex. A company that spent two decades defined by buybacks is now issuing stock, and the market is still digesting what that means.

Is the spending speculative? Not obviously. Unlike Microsoft or Amazon, Alphabet designs its own TPU chips, so a meaningful share of its capex stays inside the company rather than flowing to Nvidia’s margin. The $460 billion backlog is a contracted claim on future revenue, not a hope. Alphabet also faces a real antitrust overhang: the Department of Justice has appealed a favorable 2025 remedies ruling and is again pursuing Chrome divestiture, a risk Morgan Stanley estimates could threaten $15-25 billion in annual ad revenue.

What does that add up to? A Buy, not a Strong Buy. At roughly 26 times forward earnings, Alphabet trades at a discount to Microsoft and a steep discount to Nvidia despite comparable growth, a gap that looks more like a risk premium than a verdict on the business. A scenario-weighted fair value near $415 implies about 20% upside from the current $346.77, with earnings due July 22 likely to move the stock sharply in either direction. The case here favors a staged entry rather than a full position ahead of that print, sized modestly given the unresolved legal and capex questions still on the table.

The complete valuation model, scenario analysis, and staged trade plan are in the full Alphabet (GOOGL) report on our Reports page.