Revenue 2025
$402.8B
+15.1% YoY
Net Income
$132.0B
Margin 32.8%
FCF
$73.3B
Despite CapEx $91.4B
Gross Margin
59.7%
3-year improvement
Net Cash
$67.6B
Buyback $45.7B
1 Company Profile
Alphabet (GOOG — Alphabet Inc.) is the parent company of Google and one of the 5 largest technology companies in the world, listed on NASDAQ. The company operates Google Search, YouTube, Google Cloud, Android, and digital advertising services. Alphabet is an example of a giant tech company with diversified revenue streams — revenue of $402.8B in 2025 (+15%), and net income of $132B (32.8% margin). Google Cloud continues to grow with rising profit margins. Key note: CapEx of $91.4B (AI infrastructure) — the question of investment scale in AI relative to FCF of $73.3B.
| Activity | Characteristic |
|---|
| Google Search & Other | ~60% — core of the business |
| YouTube Ads | ~10% — video |
| Google Cloud | ~13% — high growth |
| Other Bets | <2% — Waymo, Verily |
Source: SEC 10-K 2025
2 Key Financial Observations
This summary is not a recommendation. It is a factual list of key financial metrics.
Performance — 3 Years ($B)
| Metric | Value |
|---|
| Revenue 2023 | $307.4B |
| Revenue 2024 | $350.0B |
| Revenue 2025 | $402.8B |
| Net Income 2025 | $132.0B |
| EPS 2025 | $10.81 |
Additional Metrics
| Metric | Value |
|---|
| CapEx 2025 | $91.4B |
| FCF 2025 | $73.3B |
| Buyback 2025 | $45.7B |
| Cloud Margin | Significant improvement |
Missing data: precise segment breakdown, Cloud margin trajectory, AI investment vs. regular CapEx.
Capital Expenditure (CapEx, $B)
Earnings Per Share (EPS, $)
3 Industry & Competitive Context
Mega-cap tech / search / cloud / ads. Competition from Microsoft, Meta, Amazon. Active antitrust regulation.
| Competitor | Ticker | Difference |
|---|
| Microsoft | MSFT | Cloud (Azure) + AI competition |
| Meta | META | Digital advertising competition |
| Amazon | AMZN | AWS = leading Cloud competitor |
| Apple | AAPL | Device + AI competition |
4 Risk Factors
| Risk | Context |
|---|
| Antitrust regulation | Active DOJ case, EU + UK regulation |
| AI spending | CapEx $91B — return unclear |
| AI Search competition | ChatGPT, Perplexity — threat to Search |
| Cyclical advertising decline | Advertising revenue sensitive to recession |
5 Analytical Lens — The Questions We Ask
In professional company analysis, the question is not "is this good?", but rather "from which perspectives must we examine the company so as not to miss the essence?" At Bakshi Finance, every analysis passes through six perspectives.
This framework is intended to structure analysis, not to produce an investment conclusion.
Growth
+15% — from Cloud, AI, or Search core?
Profitability
Gross margin 59.7% — improving — sustainable?
Leverage
Net cash $67.6B — how is it utilized?
Competitive Position
Search vs. AI competitors — real threat?
Management Quality
Sundar Pichai — quality of capital allocation
Business Complexity
4+ segments — how is efficiency measured?
6 Scenario Framework
Scenarios are descriptive, not predictive. They outline possible conditions, not expected outcomes.
These scenarios contain no probability assessment, no preferred direction, and no expectation as to which one will materialize.
Positive scenario — if conditions hold:
Cloud continues double-digit growth, AI Search retains share, regulation is not critical.
Base scenario — if conditions hold:
Revenue grows 10-13%, profit margin 30-33%, FCF $70-80B.
Negative scenario — if conditions hold:
AI competition erodes Search, regulation forces breakup, recession hurts advertising.
The scenarios describe conditions, not forecasts. This framework contains no preferred direction or probability assessment.
7 How to Think About This Company
Alphabet is a tech giant with 4 revenue engines. The framing for analyzing Alphabet is not "is this a good business" (one of the best in the world), but rather "will $91B of annual CapEx for AI return itself, or is it a giant outlay that will erode profit margins". This is the great debate on Alphabet in 2026.
The critical variables: (a) Cloud growth + margin — does the gross margin continue to rise? (b) AI Capex ROI — how long until it translates to revenue? (c) Search resilience — is alternative AI eroding share?
Where the analysis may go wrong: First mistake — to view CapEx as "required" without examining return. Second mistake — to underestimate the AI threat to Search. Third mistake — to ignore antitrust regulatory risk.
Professional analysis addresses three things: (a) ROI of AI Capex; (b) Cloud margin trajectory; (c) advertising sensitivity to recession.
The difference between surface analysis and professional thinking often lies in the variables that are not visible at first glance.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
8 Sources & Data
| # | Source | Date | Type |
|---|
| 1 | SEC EDGAR — 10-K 2025 | February 2026 | Official — SEC |
| 2 | IR Alphabet | Quarterly | Official |
| 3 | NASDAQ — GOOG | April 2026 | Official |
Missing: precise segment breakdown, Cloud margin trajectory, AI investment vs. regular CapEx.
