Is Alphabet Stock Still a Bargain?

Alphabet (GOOG 1.07%) (GOOGL 1.19%) stock has had a strong rally since April began. The stock has risen more than 33% since then, which may have investors wondering if Alphabet stock is still a bargain, as it was a few months ago.

Let's take a look at a few valuation measures and see if Alphabet is a buy right now or if investors should move their investment dollars elsewhere.

Image source: The Motley Fool.

Alphabet has gone from a laughingstock to a market leader

Alphabet wasn't the artificial intelligence (AI) leader it is today at this time last year. The market was concerned that AI was going to obliterate its Google Search business and that Alphabet's generative AI models (Gemini) couldn't stand up to the competition. That thesis has proven to be false so far. Google Search has transformed into an AI-first platform, with most searches now offering AI-powered summaries that enhance the overall product experience. Gemini has proven itself to be a leading AI model and can stand with some of the most prominent AI start-ups.

As a result, its valuation has increased thanks to improving confidence.

GOOG PE Ratio data by YCharts

Alphabet's price-to-earnings ratio has nearly doubled from its lows in April 2025, which may make investors concerned about its future. However, 30 times earnings has been the usual high-end range for best-in-class big tech stocks. For reference, Apple (AAPL +1.38%) and Amazon (AMZN 0.70%) trade for 36 and 32 times earnings, respectively. So Alphabet may not be expensive, but it certainly isn't cheap.

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NASDAQ: GOOGL

Alphabet

Today's Change

(-1.19%) $-4.61

Current Price

$383.05

Key Data Points

Market Cap

$4.6T

Day's Range

$381.78 - $388.75

52wk Range

$162.00 - $408.61

Volume

749.2K

Avg Vol

28.6M

Gross Margin

60.43%

Dividend Yield

0.22%

However, earnings can be affected by many things, including investment gains, one-time tax effects, and depreciation after a major capital expenditure. All three of those apply to Alphabet, and it may be helpful to look at the business in terms of operational cash flow.

GOOG Price to CFO Per Share (TTM) data by YCharts

By this metric, Alphabet is the most expensive it has been in the past decade. Now, other companies trade in this same range, but they are expensively valued. So I think Alphabet is fully valued, which means that any future upside must come from business growth. Fortunately, Alphabet grew its revenue at an outstanding 22% pace this past quarter. That's much faster than the market's 10% average, which means Alphabet is still a solid stock to buy and hold on to -- it's just not as good a value as it once was.