Alphabet Inc. (Class C)

Methodology

Alphabet's advertising-driven business model generates highly predictable earnings from Search dominance with YouTube and Cloud providing growth diversification. The company's massive operating leverage and pricing power in search create exceptional profitability. This calculation works well given revenue visibility, though regulatory risks around search monopoly and advertising spending cyclicality during recessions create some uncertainty.

Methodology

Alphabet typically commands moderate PEG ratios appearing attractive for a dominant tech platform with steady growth and exceptional margins. The company's Search moat and expanding Cloud business justify valuations, though regulatory scrutiny and competition from AI-driven search alternatives create risks. Compare to other mega-cap tech platforms to assess whether Alphabet's combination of search dominance and emerging AI capabilities warrant current multiples.

Methodology

Alphabet does not pay dividends, deploying capital toward massive share buybacks, R&D in AI and emerging technologies, and opportunistic acquisitions. Management prioritizes innovation investments and returning cash through repurchases. Total return depends on maintaining Search dominance while successfully monetizing YouTube, Cloud, and new AI products like Gemini across the platform.