Alphabet should performwell this
year. For the full year2026,we look for
revenues to advance about 20%, to $485
billion, reflectingstrengthacrossthecom
pany’s mainstay Services and Cloud
businesses. Meanwhile, the bottom line
should also make strides. First-quarter
profitsexceededourforecast,duepartlyto
asizablegainonequitysecurities.Toad
just, we have added $2.60 to our 2026
profit estimate, nowat $14.25per share.
Margins have remained wide, despite
heavyspendingontechnology.
TheServicessegmentremainsthekey
part of thebusiness. This unit (about
82%of the top line) provides numerous
productsandplatforms (Search,YouTube,
Android,Chrome,Maps,Play,Drive, etc.).
Advertisingaccounts for thebulkof reve
nues, with subscriptions comprising the
rest. Alphabet’sAI (artificial intelligence)
technology,Gemini, hasperformednicely,
given threats from competitors (OpenAI
andCoPilot). TheGemini technologyhas
been successfully engaging users while
providingadvertiserswithadvancedsolu
tions. We think Alphabet canmaintain
leadershipinthekeysearchmarketplace.
TheCloud business is also building
nicely.Thisunit (about18%of revenues)
contains theGoogleCloudandWorkspace
offerings, andprovidesenterprisecustom
erswithdigital infrastructure,storage,de
veloper tools, cybersecurity, analytics, etc.
Thisunitoperatesasafee-basedbusiness
andshouldexpanddramatically.Develop
ing features, like agentic AI technology,
will beacritical task.Attracting custom
ershasnot beenaproblem, as indicated
bya$460billionbacklog.
Capital spendingwill likely increase
further.Capital expenditureswill runat
roughly$185billionin2026.Fundsshould
be used to acquire chips, develop TPU
(Tensor Processing Units), and build
datacenters. Financing should be sup
ported from cash fromoperations, debt,
andequityofferings.Thebalancesheet is
strong,withcashof $127billionand$78
billionindebt(asoftheMarchquarter).
This stock is neutrally ranked for
Timeliness. But, our projections show
that this issue holds good appreciation
potential forthenext3to5years.Conser
vativeinvestorsmighttakealookhere.
AdamRosner July31,2026