{
  "title": "Alphabet Before Q3 Earnings: AI Growth, Capex and the Cash-Flow Valuation",
  "observedThrough": "2026-10-23",
  "lastFilingPeriod": "2026-06-30",
  "marketPriceUsd": 317.28,
  "reported": {
    "fy2025": {
      "revenueB": 402.836,
      "servicesB": 342.721,
      "cloudB": 58.705,
      "ebitB": 129.039,
      "operatingCashB": 164.7,
      "capexB": 91.4,
      "freeCashB": 73.3
    },
    "h12026": {
      "revenueB": 229.692,
      "ebitB": 80.466,
      "operatingCashB": 84.859,
      "capexB": 80.598,
      "freeCashB": 4.261
    },
    "q22026": {
      "revenueB": 119.8,
      "searchB": 63.271,
      "cloudB": 24.768,
      "cloudEbitB": 8.814,
      "cloudGrowthYoYPct": 82,
      "searchGrowthYoYPct": 17,
      "unrealizedInvestmentGainApproxB": 98
    },
    "cloudBacklogJun2026B": 513.9,
    "notYetInServicePpeJun2026B": 122.814
  },
  "companyGuidance": {
    "fy2026CapexLowB": 195,
    "fy2026CapexHighB": 205,
    "fy2027Capex": "Management expects a significant increase; no official amount"
  },
  "modelAssumptions": {
    "fy2026RevenueEstimateB": 497.522,
    "fy2026CloudRecurringProxyB": 102.206,
    "fy2026AssumedTpuSalesB": 5,
    "fy2027CapexB": 270,
    "fy2036CapexB": 280,
    "discountRatePct": 10.5,
    "terminalGrowthPct": 3,
    "terminalIncrementalRoicPct": 20,
    "cashTaxPct": 22,
    "serverShareOfCapexPct": 60,
    "serverUsefulLifeYears": 6,
    "facilityUsefulLifeYears": 20,
    "serverDepreciationLagYears": 1,
    "facilityDepreciationLagYears": 2,
    "commonSharesB": 12.35,
    "netNonoperatingAssetsAfterClaimsB": 147.028,
    "workingCapitalReinvestmentPctOfNewRevenue": 1.5
  },
  "modeledForecast": [
    {
      "year": 2027,
      "servicesRevenueB": 437.305,
      "cloudServicesProxyB": 143.088,
      "assumedTpuSalesB": 24,
      "revenueB": 605.994,
      "capexB": 270,
      "depreciationB": 48.2,
      "ebitB": 212.326,
      "fcffB": -57.813
    },
    {
      "year": 2028,
      "servicesRevenueB": 483.223,
      "cloudServicesProxyB": 188.877,
      "assumedTpuSalesB": 18,
      "revenueB": 691.699,
      "capexB": 285,
      "depreciationB": 77.508,
      "ebitB": 227.696,
      "fcffB": -31.175
    },
    {
      "year": 2029,
      "servicesRevenueB": 526.713,
      "cloudServicesProxyB": 239.873,
      "assumedTpuSalesB": 17,
      "revenueB": 785.186,
      "capexB": 295,
      "depreciationB": 109.818,
      "ebitB": 243.189,
      "fcffB": 3.103
    },
    {
      "year": 2030,
      "servicesRevenueB": 568.85,
      "cloudServicesProxyB": 292.646,
      "assumedTpuSalesB": 18,
      "revenueB": 881.095,
      "capexB": 300,
      "depreciationB": 143.522,
      "ebitB": 258.707,
      "fcffB": 43.875
    },
    {
      "year": 2031,
      "servicesRevenueB": 608.669,
      "cloudServicesProxyB": 348.248,
      "assumedTpuSalesB": 20,
      "revenueB": 978.517,
      "capexB": 300,
      "depreciationB": 178.017,
      "ebitB": 277.891,
      "fcffB": 93.311
    },
    {
      "year": 2032,
      "servicesRevenueB": 648.233,
      "cloudServicesProxyB": 403.968,
      "assumedTpuSalesB": 22,
      "revenueB": 1075.8,
      "capexB": 300,
      "depreciationB": 212.696,
      "ebitB": 294.824,
      "fcffB": 141.199
    },
    {
      "year": 2033,
      "servicesRevenueB": 687.127,
      "cloudServicesProxyB": 460.523,
      "assumedTpuSalesB": 24,
      "revenueB": 1173.25,
      "capexB": 295,
      "depreciationB": 227.454,
      "ebitB": 336.081,
      "fcffB": 193.136
    },
    {
      "year": 2034,
      "servicesRevenueB": 724.918,
      "cloudServicesProxyB": 515.786,
      "assumedTpuSalesB": 26,
      "revenueB": 1268.305,
      "capexB": 290,
      "depreciationB": 234.787,
      "ebitB": 381.016,
      "fcffB": 240.554
    },
    {
      "year": 2035,
      "servicesRevenueB": 761.164,
      "cloudServicesProxyB": 567.365,
      "assumedTpuSalesB": 28,
      "revenueB": 1358.129,
      "capexB": 285,
      "depreciationB": 240.09,
      "ebitB": 429.556,
      "fcffB": 288.796
    },
    {
      "year": 2036,
      "servicesRevenueB": 795.417,
      "cloudServicesProxyB": 612.754,
      "assumedTpuSalesB": 30,
      "revenueB": 1439.771,
      "capexB": 280,
      "depreciationB": 243.858,
      "ebitB": 469.72,
      "fcffB": 329.016
    }
  ],
  "valuation": {
    "q4StubPresentValueB": -19.624,
    "explicitFcffPresentValueB": 521.139,
    "terminalEnterprisePresentValueB": 1546.206,
    "enterpriseValueB": 2047.72,
    "equityValueB": 2194.749,
    "pricePerShareUsd": 177.712,
    "terminalShareOfEnterprisePct": 75.5,
    "marketPriceUsd": 317.28,
    "marketImpliedWaccPct": 7.77,
    "referenceDiscountRatePct": 10.5,
    "terminalReinvestmentFractionPct": 15,
    "terminalNormalized2036FcffB": 311.424,
    "terminalForward2037FcffB": 320.767
  },
  "sensitivity": {
    "roicPct": [
      15,
      20,
      25,
      30,
      40
    ],
    "rows": [
      {
        "waccPct": 8.5,
        "values": [
          253.4058,
          265.503,
          272.7613,
          277.6001,
          283.6487
        ]
      },
      {
        "waccPct": 9,
        "values": [
          227.2,
          237.7815,
          244.1304,
          248.363,
          253.6538
        ]
      },
      {
        "waccPct": 9.5,
        "values": [
          205.1834,
          214.5059,
          220.0994,
          223.8284,
          228.4896
        ]
      },
      {
        "waccPct": 10,
        "values": [
          186.4533,
          194.7172,
          199.6755,
          202.9811,
          207.113
        ]
      },
      {
        "waccPct": 10.5,
        "values": [
          170.3478,
          177.7124,
          182.1312,
          185.0771,
          188.7594
        ]
      },
      {
        "waccPct": 11,
        "values": [
          156.3708,
          162.9648,
          166.9211,
          169.5587,
          172.8556
        ]
      }
    ]
  },
  "limitations": [
    "Q3 2026 financial results had not been reported at this snapshot.",
    "Reported Google Cloud aggregates services, Workspace, and direct TPU hardware; the assumed hardware split is unverified.",
    "FY2026 revenue is an analyst bridge that includes an assumed Q4, not full-year company guidance.",
    "FY2027–2036 operating margins, depreciation timing, capex and terminal ROIC are scenarios, not observable forecasts.",
    "Financial-asset haircuts, preferred-stock treatment, equity issuance and diluted share denominator require new review after Q3.",
    "Terminal value dominates the estimated enterprise value."
  ],
  "primarySources": [
    {
      "title": "Alphabet 2025 Form 10-K",
      "url": "https://www.sec.gov/Archives/edgar/data/1652044/000165204426000018/goog-20251231.htm",
      "asOfDate": "2025-12-31"
    },
    {
      "title": "Alphabet June 2026 Form 10-Q",
      "url": "https://www.sec.gov/Archives/edgar/data/1652044/000165204426000071/goog-20260630.htm",
      "asOfDate": "2026-06-30"
    },
    {
      "title": "Alphabet Q2 2026 results",
      "url": "https://www.sec.gov/Archives/edgar/data/1652044/000165204426000066/googexhibit991q22026.htm",
      "asOfDate": "2026-07-22"
    },
    {
      "title": "Alphabet announces date of third-quarter results call",
      "url": "https://abc.xyz/investor/",
      "asOfDate": "2026-10-06"
    },
    {
      "title": "GOOG historical share prices",
      "url": "https://stockanalysis.com/stocks/goog/history/",
      "asOfDate": "2026-10-23"
    },
    {
      "title": "Alphabet Q3 2026 earnings estimates",
      "url": "https://www.marketbeat.com/earnings/reports/2026-10-28-alphabet-inc-stock/",
      "asOfDate": "2026-10-24"
    }
  ]
}