This AI Powerhouse Stock Is Shockingly Cheap

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) might just be the tech world's biggest bargain – and not because its products are free. While the AI hype machine sends Microsoft Corp (NASDAQ:MSFT), Nvidia Corp (NASDAQ), and Amazon.com Inc (NASDAQ:AMZN) stocks soaring into the valuation stratosphere, Google's parent quietly trades at a discount that looks harder to justify by the day.

Google Stock Trades At 35% Discount To Mag 7 Peers

As of June 12, Google stock trades near $177 with a forward P/E of just 19.2x, per Benzinga Pro data – significantly below its Magnificent Seven peers. Apple Inc (NASDAQ:AAPL) (25x), Microsoft (31x), Amazon (33x), Tesla Inc (NASDAQ:TSLA) (167x), and Nvidia (33x). Even Meta Platforms Inc (NASDAQ:META) (27x), the other ad-tech giant, is pricier. Yet Alphabet's fundamentals don't just hold up – they shine.

Excluding Tesla's outlier valuation, Google trades at a 35.6% discount to the peer average of 29.8x, with individual discounts of 23% to Apple, 38% to Meta, and over 40% to Microsoft, Amazon, and Nvidia.

Read Also: Waymo’s Pricey Rides Are Still Stealing Uber, Lyft Customers

Google Stock: A Cash Machine With AI Tailwinds

Google Cloud is growing like a weed, logging $12.26 billion in first-quarter revenue – a 28% year-over-year jump, with margins rising to 17.8%. Its core ad business? Still a cash machine, pulling in $66.89 billion last quarter, well ahead of expectations. YouTube Shorts is finally making money, and Waymo is quietly scaling into a real business, now clocking over 250,000 driverless rides a week.

Meanwhile, Alphabet is threading AI into every product it touches – from AI Overviews in Search to Gemini-powered tools across Workspace and YouTube. It even designs its own Tensor Processing Units, cutting down reliance on Nvidia and boosting margins.

Analysts See 14% Upside From Current Levels

And the valuation? Recent analyst ratings from JPMorgan, Oppenheimer and WestPark Capital see the stock’s fair value at $201.67. That's about 14% upside, even before factoring in the $96 billion cash pile or the $70 billion buyback plan.

Yes, there are risks: the DOJ's antitrust ruling looms, and Apple may be inching toward search. But Alphabet’s sticky ecosystem – Chrome, Android, Gmail, YouTube – still dominates digital life.

In a market obsessed with AI, Alphabet's stock appears to offer value. For investors looking to ride the AI megatrend without paying AI-bubble prices, Google stock may just be the tech titan on sale.

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Image created using artificial intelligence via Midjourney.