Hey everyone, Hirokichi here.
Alphabet, the parent company of Google, just rolled out a string of new Gemini models on July 21, 2026, and its second-quarter (April-June) earnings are due right after the market close on July 22. Competition in generative AI keeps heating up against OpenAI’s ChatGPT and Anthropic’s Claude, but Google is fighting back with its own weapon: a rock-solid revenue base built on Search, Cloud, and YouTube. This time I’m taking a look at Alphabet (GOOGL) – where the stock stands today, the latest evolution of Gemini and NotebookLM, and how the company stacks up against its AI rivals.
- What kind of company is it? A giant that earns across search and AI
- Stock price and valuation: closed at 347.15 dollars on July 21, 2026
- Earnings check: Cloud is doing the heavy lifting behind steady growth
- What’s next: massive AI investment, and the evolution of Gemini and NotebookLM
- Stock outlook: bullish and bearish factors
- Wrapping up
What kind of company is it? A giant that earns across search and AI
Alphabet is the holding company behind the “Google Search” search engine, the “Android” smartphone OS, and the video platform “YouTube.” Advertising (Google Search and YouTube ads) is still the core of its earnings, but in recent years its enterprise cloud business, “Google Cloud,” has grown rapidly, and it’s also nurturing the self-driving taxi service “Waymo.”
Its biggest strength is the overwhelming user base behind a search market share of over 90%, and the ad revenue that comes with it. On top of that, Alphabet designs its own AI chips called “TPUs” (Tensor Processing Units, custom chips built specifically for AI computation), which helps it run AI workloads more cheaply than many rivals. In generative AI, its flagship products are the chatbot “Gemini” and “NotebookLM,” which reads documents and summarizes and analyzes them for you.
Stock price and valuation: closed at 347.15 dollars on July 21, 2026
Alphabet (GOOGL) closed at $347.15 on July 21, 2026 (source: stockanalysis.com). Over the past year the stock has swung wildly between $187.82 and $408.61, and it hit an all-time closing high of $402.38 on May 13, 2026 (source: MacroTrends). The stock returned +65.99% in 2025, and is up another +11.05% year-to-date as of July 21, 2026 – back-to-back years of big gains.
Market cap stands at roughly $4.26 trillion (source: MacroTrends, as of July 21, 2026). On valuation, the trailing P/E ratio (price-to-earnings ratio, a rough gauge of how expensive a stock is relative to its profits) is 26.85x, the forward P/E is 27.67x, and the P/B ratio (price-to-book ratio, how many times book value per share the stock trades at) is 12.8x (source: stockanalysis.com). The dividend yield is a modest 0.25%; in April 2026 Alphabet raised its quarterly dividend 5%, from $0.21 to $0.22 per share. Alphabet leans much more on buybacks than dividends – of its $70 billion buyback authorization, $69.5 billion was still unused as of the end of March 2026 (source: Alphabet 10-Q).
Looking back over the past year, the stock roughly doubled from its 2025 lows before pulling back somewhat from the May 2026 peak – a pattern you can see clearly in the chart above.
Earnings check: Cloud is doing the heavy lifting behind steady growth
Alphabet’s revenue and operating income have climbed steadily from 2022 through 2025. Revenue grew from $282.8 billion in 2022 to $307.4 billion in 2023, $350.0 billion in 2024, and $402.8 billion in 2025. Operating income rose from $74.8 billion in 2022 to $129.0 billion in 2025 (source: Alphabet 10-K).
In its most recent quarter, Q1 2026 (January-March), Alphabet posted revenue of $109.9 billion (up 22% year-over-year) and operating income of $39.7 billion (up 30%), for a high operating margin of 36.1%. Google Cloud revenue accelerated to $20.0 billion (up 63%), with operating margin expanding sharply from 17.8% a year earlier to 32.9% (source: Alphabet Q1 2026 earnings materials). Note that Q2 2026 (April-June) earnings are scheduled for release after the market close on July 22 – the day this article is being written – and the market’s key question is whether Google Cloud can keep growing at around 60%.
As the chart shows, both revenue and operating income have grown consistently, with the recent surge in Cloud clearly driving results higher.
What’s next: massive AI investment, and the evolution of Gemini and NotebookLM
Alphabet raised its 2026 capital expenditure guidance (spending on data centers and AI servers) to $180-190 billion. That’s more than five times the $32.3 billion it spent in 2023, just three years earlier, with roughly 60% of the money going to servers and 40% to data centers. The company is also ramping up production of its seventh-generation AI chip, “Ironwood” (TPU v7). Google Cloud’s backlog (signed contracts not yet recognized as revenue) nearly doubled quarter-over-quarter to $462 billion in Q1 2026, already exceeding all of 2025’s full-year revenue (source: Alphabet Q1 2026 earnings materials).
Its generative AI products are being updated at a rapid clip too. On July 21, 2026, Google announced the lightweight models “Gemini 3.6 Flash” and “Gemini 3.5 Flash-Lite,” which use 17% fewer tokens than the previous Flash model while also coming in cheaper. A security-focused model, “Gemini 3.5 Flash Cyber,” has also shipped. On the other hand, the next flagship model, “Gemini 3.5 Pro,” remains in partner testing and has been slow to arrive – a point the market is watching nervously heading into today’s earnings. Internally, Google has already kicked off large-scale pre-training for the next-generation “Gemini 4” (source: TechCrunch, 9to5Google).
NotebookLM, its document-analysis AI, also got a major update on June 8, 2026, adding a per-notebook code execution environment, a feature that automatically suggests related sources via web search, and export options as editable PowerPoint or PDF files. Back in November 2025 it also gained “Deep Research,” a feature that autonomously researches the web and produces citation-backed reports (source: TechCrunch, Google’s official blog).
On the competitive landscape, ChatGPT reportedly leads chatbot app usage with a 46.4% share, followed by Gemini at 27.7% and Claude at 10.3%. On the revenue side, though, Anthropic’s annual recurring revenue (ARR) of $47 billion has overtaken OpenAI’s $25 billion, and some surveys suggest Claude is winning the majority of large enterprise deals. Against that backdrop, Google is pushing “Gemini Enterprise,” which lets businesses use more than 200 external models – including Anthropic’s Claude – not just Gemini. That open, multi-model strategy is a distinguishing feature of how Google is trying to win over corporate customers (source: various media reports).
Stock outlook: bullish and bearish factors
On the bullish side, three points stand out.
(1) Google Cloud’s backlog has swelled to a size that exceeds all of 2025’s full-year revenue, showing that AI demand is translating into real, contracted revenue.
(2) Even after rolling out AI Overviews (AI-generated summaries shown in search results), search ad revenue hasn’t suffered – if anything, search query volume itself has grown.
(3) The cost advantage from its in-house TPUs, combined with an open strategy that also welcomes rival AI models, is making Google an increasingly attractive platform for enterprise AI adoption.
On the bearish side, three risks are worth watching.
(1) 2026 capital expenditure has jumped to $180-190 billion, and if the payoff is slow to arrive, it could squeeze free cash flow (the cash left over after covering expenses).
(2) The delayed rollout of the next flagship model, “Gemini 3.5 Pro,” continues, and the market is uneasy about whether Google can keep pace in the AI race.
(3) The US search-monopoly lawsuit remains tied up in appeals with an uncertain outcome, and in the EU, a $4.1 billion antitrust fine over Android practices has now been finalized – regulatory costs look set to keep piling up.
Personally, given how fast Google Cloud’s backlog is growing and how quickly Gemini and NotebookLM are being rolled out, I think Alphabet is one of the few companies that’s actually converting AI hype into real revenue. That said, the stock is up more than 80% over the past year, so a lot of optimism already looks priced in. I’ll keep checking each earnings report to see whether all this investment keeps showing up in the numbers.
Wrapping up
Alphabet (GOOGL) combines a rock-solid Search and advertising business with an AI strategy built around the rapid growth of Google Cloud and the evolution of Gemini and NotebookLM, and the stock has rallied hard over the past year. At the same time, it’s carrying real risks: a sharp jump in capital spending, a delayed next-generation AI model, and ongoing regulatory pressure. Weigh both the bullish and bearish sides, and make whatever investment decision fits your own comfort level. As always, steady and sustainable wins the race. See you in the next one!
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日本語版はこちら → 【銘柄分析】Alphabet(GOOGL)は買い時？株価347ドル、GeminiとNotebookLMの進化をライバル比較で解説
* This article is for informational purposes only and does not recommend buying or selling any specific stock. Please make investment decisions at your own responsibility.
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