Alphabet Rises 100% as Google Stock Price Hits 25 Times Earnings
Alphabet’s google stock price is up around 100% over the past year, and the shares now trade at about 25 times forward earnings. The move has turned a stock once viewed as clearly undervalued into one priced closer to the broader market.
Alphabet's 100% Year Rally
100% is the scale of the advance in Alphabet shares over one year, lifting the company into the position of the second-largest company in the world. For investors, that shift changes the entry point: the same business now carries a much richer valuation than it did before the rally.
25 times forward earnings is where the stock trades now, compared with 22.2 times forward earnings for the S&P 500. A year ago, the stock was clearly undervalued, but that gap has narrowed after the sharp run-up.
Google Search Revenue Up 19%
19% year over year is how much Google Search revenue rose in Q1, after a period when search was largely presumed to be obsolete and soon to be replaced by generative AI. Alphabet’s parent company also integrated AI into Google Search through AI overviews, giving the core product a new layer while revenue still expanded.
63% Q1 growth in Google Cloud adds another support point for the rally, with demand tied to servers, AI computing capabilities, and sales of in-house custom AI chips. Those figures help explain why Alphabet’s 22% year-over-year revenue growth and 30% rise in operating income have kept the stock’s rebound tied to operating performance, not just multiple expansion.
25 Times Earnings, 22.2 Times S&P 500
22.2 times forward earnings for the S&P 500 puts Alphabet only modestly above the index on that measure, even after the stock’s meteoric rise. The friction point is valuation: the company is still growing fast, but the market is no longer pricing it as a clear bargain.
If Alphabet keeps posting double-digit growth in search, cloud, revenue, and operating income, the current valuation can still hold. If that pace slows, the debate shifts from whether the stock was cheap to whether 25 times forward earnings already captures the upside.
