Opinions Jim Cramer - Mad Money
Alphabet IncGOOGWATCHFeb 05, 2025
Jim Cramer - Mad MoneyStock price when the opinion was issued
As of Jul 31, 2026. Market Open.
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That was an eye-opener. The Mag 7 has peaked, and it could be a multi-year peak due to the negative free cash flow. GOOG is one of the winners in AI. Once the PE declines or AI spending slows, the stock could react better. The street would be very disappointed if only the core businesses of the Mag 7 were generating free cash flow growth and AI was not. It's tough to look through AI spend and invest the Mag 7 which remain great companies, but now face the biggest risk in years.
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Premium contentIn the last quarter, the company reported 9.11 USD per share, beating the 2.88 USD estimate by 216.66%. Revenue for the same period reached 119.80 B USD, despite the estimate of 117.06 B USD. For the next quarter, analysts expect 3.02 USD in earnings per share and 124.53 B USD in revenue. Social media mentions are up 405% in the past 24h.
He trimmed a little early this year, but likes it. Their relationship with the customer is strong across its platform. Secondly, growth is remarkable. Also, the valuation is reasonable. Their AI model is not the best, but it's competitive. Can you keep your eyeballs on a Google product? Yes. Gemini is integrated in their search, so that removes the threat to their search.
Julien Nono-Womdim
Fears that AI would eat its lunch. Harder for Anthropic to monetize a new tool than for GOOG to take AI and apply it to a business model that it already monetizes. Muscle memory of the populace gravitates to GOOG to find information. Probably thrives in the new AI world, until something more disruptive comes along.
A Hold for him today instead of a Buy, just on valuation (~30x PE). Very robust growth outlook. To add, wait for a bit of a pullback -- the potential for valuation upside gives you less risk, and you can't expect multiple expansion from current price point.
Chris BlumasFantastic year. Recently pulled a bit back from peak. Gemini has been exceptional. Ancillary assets deserve attention. Great long-term hold.
John ZechnerAI monetization is happening, and AI Mode has been a game changer. Stronger cloud growth (revenue grew 63% YOY last quarter, tremendous), broader monetization across platforms. Search and advertising remain strong, lots of cashflow. Also a great ecosystem.
Good growth, but relatively decent valuation. Yield is 0.25%.
Stan WongStill one of the highest-quality businesses in the world. Wide range of opportunities despite the runup. Cloud has been doing extremely well. Reasonable valuation. 9/10 on fundamentals. Regulatory scrutiny a potential risk. Massive user base, proprietary data.
(Analysts’ price target is $430.00)
Brianne GardnerFirst quarter since Covid it didn't buy back stock. Raised capex by $5B. Gemini is outstanding, leading it to win at Search as well as to concrete monetization. Only trading at 22x PE for 2028 and 17% growth. Stock still works, more to go.
Greg Newman
Shares dropped 7.29% on reporting. It got punished for announcing spending of $75 billion in capex this year--punished for investing heavily in growth, which is a big change from last year. It ran up 25% since last September till the report, making it the third-best performer in the Mag 7. The quarter was mixed: slightly weaker revenue and surprisingly weaker Cloud revenue, but EPS and YouTube revenue beat. Growth slowed, but core advertising is still doing great. And yet Microsoft is spending $80 billion in capex, and Meta $65 billion. What has changed is the arrival of DeepSeek, which has changed the narrative around AI spending: Do megatech companies still need to spend a lot on AI infrastructure? Is the reaction to GOOG an exception or the new norm?