GOOGL Analysis: Alphabet's $3.8 Trillion Rebound — Why the Post-Earnings Selloff Was a Gift for Patient Investors
Alphabet Inc. closed at $314.98 on Friday, up 4% on the session and reclaiming ground after a turbulent February that saw the stock punished following its Q4 2025 earnings report. Shares remain roughly 10% below the 52-week high of $349, despite Alphabet delivering what Seeking Alpha called "the best hyperscaler quarter" of the reporting season — with Google Cloud revenue surging 48% year-over-year and cloud operating margins expanding to 30.1%. The selloff was driven by a single number: Alphabet's guidance for $175–$185 billion in 2026 capital expenditure, dwarfing the $91.4 billion spent in 2025 and blowing past the $115 billion Wall Street consensus. Investors recoiled at the near-term free cash flow implications, sending shares down 7% on earnings day. But nine days later, the stock is recovering — and the fundamental picture suggests the market's initial reaction was overdone. With a trailing PE of 29.2x, a $3.81 trillion market cap, and full-year 2025 revenue of $402.9 billion (up 18% year-over-year), Alphabet remains one of the most profitable companies on Earth. The question investors face now is whether the AI capex surge is a value trap or a generational opportunity. The data points firmly toward the latter.