Why I Can’t Stop Buying This 16 P/E Tech Giant: My Biggest August Bet
Vandita Jadeja
Mon, July 27, 2026 at 7:00 PM GMT+5:30
4 min read
- GOOG
+3.32% - MSFT
+2.69% - AMZN
+1.11%
Quick Read
GOOGL dropped 7% despite a 199% EPS surprise and 24% revenue growth, creating a buying opportunity at just 16x earnings
Alphabet’s Cloud growth hit 82% with a $514 billion backlog, making it more compelling than Microsoft or Amazon at a market-average multiple
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I keep clicking buy on Alphabet (NASDAQ:GOOGL), and the July pullback only made me do it more. The stock printed $348.10 the afternoon Alphabet released Q2, then closed at $319.74 two days later. That is a -7.13% earnings-day drop on a 199.41% EPS surprise. When a business grows revenue 24.23% year over year and the market shrugs, I pay attention
Google runs a profitable ad engine, a hyperscale cloud, a global video network, a leading consumer AI app, and a driverless taxi business under one roof. That full-stack posture is what Sundar Pichai calls “differentiated”, and this quarter I finally see the receipts
The Three Reasons I Keep Adding
First, Google Cloud is accelerating. Growth has gone from 34% to 48% to 63% to 82% across the last four quarters. Cloud backlog reached $514 billion in Q2, up more than $50 billion sequentially
Nearly 90% of the Fortune 100 uses Gemini Enterprise. Cloud operating margin hit 35.6%, up from 20.7% a year earlier, and segment operating income more than tripled. This is what winning a platform race looks like on the income statement
Second, Search keeps compounding through AI. Search and other revenue grew 17% to $63.27 billion. AI Mode is past 1 billion monthly active users, the Gemini App has 950 million MAU, and management said cost per AI Mode response is at its lowest level since launch. Pichai said “Search usage hit an all-time high during the World Cup this year”. AI is making the moat deeper
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Third, the balance sheet funds the buildout. Alphabet holds $242.5 billion in cash and marketable securities and $640.48 billion in shareholders equity
Long-term debt doubled to $98.2 billion, but the company raised $70 billion combined in equity and debt this quarter to prefund the plan. At a P/E of 16, I am paying a market multiple for the company running the most aggressive AI infrastructure program in the index
Why Not Microsoft or Amazon
Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) are the obvious choices. I pass because Alphabet shows Cloud growth accelerating from 34% to 82% over four quarters, a $514 billion backlog, and 90% Fortune 100 penetration inside Gemini Enterprise, all attached to a Search business still growing 17%. That combination sits at a 16 P/E. I want the combination and the multiple
