Why Alphabet Stock Popped This Morning
Key Points
Tigress Financial Partners analyst Ivan Feinseth raised his price target for Alphabet stock last night.
Alphabet is an AI leader "across Search, Cloud, and YouTube."
Alphabet's actual free cash flow is barely 22% of its claimed "profits," however.
- 10 stocks we like better than Alphabet ›
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock jumped as much as 3% in early trading Friday before retracing a bit later in the morning. As of 11 a.m. ET, Alphabet stock is still up a modest 1.1%.
You can probably thank Tigress Financial Partners for the boost.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Analyst Ivan Feinseth at NYC-based financial services company Tigress Financial Partners raised his price target on Alphabet stock last night, you see. Valuing the tech giant at $485 a share (up from $415 previously), the analyst insists Alphabet stock is still a "strong buy."
And why?
Because AI. That's why.
Image source: Getty Images.
Why Google makes Tigress purr
Feinseth calls Alphabet a leader "across Search, Cloud, and YouTube," and says the company's "AI flywheel" is boosting earnings across all of these businesses. Revenue is growing, profit margins widening, and monetization... monetizing, argues the analyst in a note covered on StreetInsider.com.
In the short term, we're still seeing issues with return on capital (and insanely high capital spending). But longer term, the analyst argues, "Alphabet's scale, profitability and diversified ecosystem support exceptional long-term returns."
What's next for Alphabet stock?
Many analysts agree with Tigress's assessment. According to data from S&P Global Market Intelligence, Alphabet's seemingly reasonable 17.2x price-to-earnings ratio is nearly matched by a forecast for 14.6% annual earnings growth over the next five years. Factor in a modest 0.3% dividend yield, and the total return ratio for Alphabet is only 1.1x -- not a huge premium to pay for a technological leader.
What worries me is not Alphabet's GAAP earnings, but its actual free cash flow. With capex continuously draining operating cash flow as it builds out its AI empire, Alphabet's trailing FCF is currently barely $53 billion -- less than 22% of reported "earnings."
Maybe I'm overreacting here, but when I look at Alphabet's 80x price-to-free cash flow ratio, buying this stock is the last thing I want to do.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $406,141!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,347,745!*
Now, it’s worth noting Stock Advisor’s total average return is 940% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of September 18, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
Recommended Articles
