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Alphabet Looks Strong, but Shares Fairly Valued

The Google parent should remain an advertising behemoth and gain traction in the enterprise cloud, but shares aren't cheap.


Strength in Google's advertising, cloud, and hardware offerings helped accelerate overall revenue growth from a year ago, leading to better than expected results for parent Alphabet.

While the better than expected first-quarter revenue helped beat expectations on the bottom line, we note that the growing traffic acquisition costs, plus further investments in data centers and content acquisition, continue to push gross margin lower, as we expected.

Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.