An Alphabet Stock Deep Dive

In this episode of Motley Fool Money, Motley Fool contributors Travis Hoium, Lou Whiteman, and Rachel Warren discuss:

• The search core.
• YouTube’s scale and potential.
• Google Cloud’s growth.
• Hidden gems we’re excited about.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on April 15, 2026.

Travis Hoium: Alphabet is one of the biggest companies in the world, so it's time to take a deep dive. Motley Fool Money starts now.

Welcome to Motley Fool Money. I'm Travis Hoium joined today by Rachel Warren and Lou Whiteman, and we have a big event today going on this week for Motley Fool one members. We're recording this a little bit early, but I still get to get together with Rachel and Lou to talk today a little bit about Alphabet. This is one of those companies that just seems to get bigger and more powerful by the year. We're going to go through some of their biggest businesses. Then at the end of the show in the last segment, we're going to talk a little bit about what the future of this company might look like, some hidden gems that might be hidden on the balance sheet.

But Lou, I wanted to start with their core business. What we're going to talk about as the core is search and others, the way that they report it. The network revenue. That's the one segment that's in decline. Then what they call subscription platform and devices. This includes Android and all other stuff involved in there. But this is really the business that we thought was potentially going to be disrupted by things like ChatGPT. Well, that didn't happen. Search is now growing double digits in 2025, I think we probably expect about the same in 2026. Subscription platform and devices grew over 20%. I mentioned that network business is in decline a little bit, but that's more structural the way that the Internet has changed. When you think about this core for Alphabet, where is this business going in the future?

Lou Whiteman: It's stable. Whether or not the growth is sustainable, I don't know, but I think the goal is, and what's special about Alphabet, what's unique about Alphabet is that's stable, is good enough. I'm talking about the whole thing put together here because is search stable? I don't know. Search is evolving, but I've seen enough to conclude that Gemini can at least prevent that from being a total collapse. I'm not worried about it. I don't know what the net net is after, but even if search goes down, Gemini goes up. Stable is good enough here because Alphabet is set up with this unique structure where we have this cash cow, and then we are going to invest in growth elsewhere. The flywheel is healthier now than it has ever been. If they get growth from this core business, all the better. We're not going to discount that, as investors we like that. But what's important is that we can fund these other bets, these side projects that can turn into something, and those other bets have never looked more mature and more stable. It used to be a frat house, and now it is actually a collection of businesses. The bottom line here is that the core business growth there is the icing on the cake. The thing is, can it sustain? The answer is a solid, yes.

Travis Hoium: Rachel, do you think that's right? We'll talk about some of the growth segments and some of the maybe potentially even more difficult to disrupt. But this is $302 billion worth of revenue in the last year alone. This just seems like one of those businesses that even when you get to this size, you seem to run into the large numbers, and Alphabet just never seems.

Rachel Warren: You know it's funny because I think so many of the companies that we see throwing money at AI, there is not a cohesive strategy, and nothing could be further from what we're seeing with Alphabet, which the foundation of its business is arguably the most successful advertising engine in history. This is a very stable business, like Lou said. But it's worth noting, the growth continues to accelerate. Their annual revenue surpassed 400 billion for the first time. Search revenue alone hit 63 billion in a single quarter, in Q4. I think the really important thing is obviously this core of the business, the search business, the big fear has been, well, now that we have all of these amazing AI tools, that's going to completely cannibalize traditional search. But I think what we are seeing and what we continue to see is that those AI-driven features that they are incorporating, driven by Gemini, a lot of these other tools they're rolling out are actually increasing user engagement. It's keeping people on the platform longer for much more complex queries. It's opening up higher-value ad inventory, which is really key for the advertisers on Google and even with the rise of ChatGPT, Perplexity, Google's search volume remains a historic highs.

This is because I think of a variety of reasons, one of which this habit of "googling.” Is highly ingrained in our global culture. I think that has created a really exceptional foundation as they move into this next era of growth. I do think it's fair to argue that they are starting to transition from more of a high-margin software-only model towards a more capital-heavy infrastructure model. I know we'll talk about that a bit more in the next segment. But I think this is the next part of the growth story for Alphabet. I like where it's going. I think compared to a lot of the other tech businesses we see that are throwing money at AI, not sure where it's going to stick, we're seeing a really well-defined strategy.

Travis Hoium: Lou, when we look at Alphabet, one of the things that strikes me is that sentiment has changed around the company so much over the past 12 months. A lot of that is really related to search and how they're folding in artificial intelligence. When you look at a company like this, and we'll talk about some of the other value that's hiding on the balance sheet, but its stock is now trading for 30 times earnings but revenue is growing double digits. Is this the business that in a world of AI, AI can be a sustaining innovation for them and even potentially a growth driver in these core segments. What we know from the old Google, is this going to be something where, I always think of my wife as an example. She's using AI mode in search, but she is not using ChatGPT or Anthropic. Is that going to be more people than not in the future, and Google Is just still going to be this massive winner a decade from now?

Lou Whiteman: I'm going to change the question a bit, but I think you're onto something here. Whichever consumer product people use, I think they will use Gemini, but whether that matters at the end of the day, who knows? But for all the attention on the hyperscalars and yes, Google Alphabet is one of the hyperscalars. I think the value in AI isn't necessarily going to go to the hyperscalars. It's going to be with the way the subtle refinements in a trillion different business processes that can come out of AI. I think the real benefit of AI for Alphabet is exactly what you're saying, just the tiny little changes or the things that can either get more efficient, more sticky, better in all of these core businesses we're talking about. They still have a ways to go. The autocomplete in Gmail is ridiculous right now, so we're in early stages. But just a trillion different advance, things like that, getting that right and just infusing AI in. I think that is the path and not just spend a quadrillion dollars as a hyperscaler, and no one is better than them at that. Microsoft is the only one that really even sniffs at.

Travis Hoium: Final question, Lou. When you look back on Alphabet's history, there's been a lot of thrown spaghetti at the wall, and we talked about that with companies like OpenAI. But you look at some of this big spaghetti they've thrown at the wall, are moves like building Chrome, buying and building out the ecosystem for Android, you have things like Maps. Is this going to ultimately be the mode that makes this an enduring business, not just that search bar, but all the stuff they've built around it?

Lou Whiteman: Again, I'll go back to the beginning. I think the core that they have created, and yes, they created it by just trying different things. They were a search company that decided to do email. I think we get it, but that has created just this core that generates the cash needed for them to try new things. Whatever alphabet looks like in 10 or 20 years, I think that the foundation that they have built is right up there.

Travis Hoium: Was that accidental, though, or was that intentional? This is what's always so interesting to me with Alphabet is they seem to be in this perfect position today. It's just both. Is that, hey, we threw so many things at the wall, and if we built this unintended mode around ourselves in a world of AI, cool.

Lou Whiteman: I think they intentionally tried a lot of things knowing. This is the Silicon Valley cliche. They weren't afraid to fail. They went out and said, "We are going to try a lot of things knowing full well only some of them are going to stick." I think it was intentional the attempt, but I doubt they could have predicted exactly how it turned out.

Travis Hoium: When we come back, we're going to talk about, I think, maybe the biggest hidden gem, that's YouTube. You're listening to Motley Fool Money.

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Travis Hoium: Welcome back to Motley Fool Money with the Hidden Gems team. Rachel, one of the fascinating businesses under Alphabet is YouTube. I thought it was a crazy acquisition when they made it, a little over a billion dollars. Maybe the best acquisition in the history of technology up there with Facebook buying Instagram. But over the past year, they've generated over $40 billion worth of ad revenue. We know that they don't report the specific numbers for YouTube. This is something I think a lot of us wish they would what operating income is, things like that. But you add in the subscriptions, premium, if you pay for that. It's over $55 billion in revenue. We know that probably more like 60 billion in revenue. This is a business that's now bigger than Netflix, has more viewing time than Netflix even on TVs. It's the biggest streaming service in the world. This just seems like a hidden gem sitting under YouTube under Alphabet, and it's got the backing of the biggest ad network in the world.

Rachel Warren: That's absolutely right. It's funny because I think even now when people hear streaming, they think Netflix, they think Disney Plus. But the reality is that YouTube has become very quietly, the undisputed leader here. It's the number one streaming service. It accounts for, according to Nielsen, more than 10% of all TV viewing, beating out every other paid platform. You're talking about a platform that has effectively replaced traditional cable for an entire generation or series of generations at this point.

Travis Hoium: If you have kids, you know that.

Rachel Warren: It's true, and it's such a combination. You've got a 24/7 global newsroom, music service, immense library of educational and entertainment content, podcasts all under one roof on this one cohesive platform. From an investment perspective, YouTube is really this ultimate high-margin growth engine because the users on YouTube are really the ones doing the heavy lifting. You've got Netflix that spends about 20 billion a year on original content just to keep people from unsubscribing. YouTube's inventory is created by millions of creators. Then Google only pays them out once the ad revenue hits a certain point and actually rolls in. It's a genius model, low risk for Alphabet, infinite scale, very sticky. You noted those numbers at the beginning, probably about 60 billion or more combined in subscriptions and ad revenue from YouTube. So much growth there. I think it's just very clear that this is a platform that is part of the modern media landscape and continues to play a more pivotal role in viewership.

Lou Whiteman: I don't want to be the bear here because it's a great business, but maybe splash a little cold water on that. Is it a genius model? It's a different model. Yes.

Travis Hoium: It's also one that seems to be harder to copy. Disney Plus, Paramount can copy what Netflix is doing, none of them are going to be able to do what YouTube does.

Lou Whiteman: I don't know. TikTok is better at it at Gen Z right now. The thing is that a lot of it is garbage. It's just a different model. Yes, they pay less, but it's lower-value content. I don't know what to make of it. I think the YouTube, Netflix comparison only really matters to people like us. They're just different businesses, and they're going after different things. One is a lot more expensive to create, but I think has the ability to charge a premium. The other one has got to rely on advertising on a lot of the user-based content. That's the beauty of it and the flaw. Here's the thing, though, I'm glad we brought up the cable thing, I think about this a lot. As long as Netflix can produce quality, I think there is a place in my life for Netflix. But as we get to a future where fewer and fewer people have cable, where some of these traditional networks go away, I feel like the cable replacement isn't necessary either one day, that it'll just be, right now my Roku is just a series of apps. One of the apps is YouTube TV that gets me those old-world TV channels. As those go away, do we really need YouTube TV and if so?

Travis Hoium: We just need YouTube. I think that's the point.

Rachel Warren: It's not about YouTube TV, it's the whole platform, Lou.

Lou Whiteman: Well, right, but a lot of the revenue right now is coming in through YouTube TV. Advertising sustained businesses are difficult. It's just the world is changing. They have a place. Netflix has a place. Who has more depending on what your metric, that's not really important. But here's the thing, I'm not a big fan of this business or I'm not just gaga about this business, but I respect Alphabet's ability to evolve with the market, and I suspect it'll still be a contributor over time, and that's what counts.

Travis Hoium: If Alphabet wants to disclose how much revenue comes from YouTube Proper, how much comes from YouTube TV, we can finish this argument. But if you have comments about whether you love YouTube or not, leave them in the show notes. Leave them for Lou. Let's move on to Google Cloud. This is the one that's gotten the most attention over the past few years from investors. The numbers here are crazy. A few years ago, it was actually the March 2023 quarter was the first time that Google Cloud made an operating profit. It was not making an operating profit until then. In the most recent quarter, Google Cloud grew 48% to $17.7 billion worth of revenue and had an operating margin that nearly doubled from a year ago to 30.1%. Rachel, this seems to be, if you're looking for growth under Alphabet, this is it. It's not a majority of revenue yet, but man, it could be in five or 10 years, it seems like.

Rachel Warren: This is becoming an increasingly important growth engine for Alphabet's business incredible, $240 billion backlog that surged I think more than 50% recently. A lot of that's driven by enterprises desperate for AI infrastructure. I think the real potential here for Google Cloud is the transition from hosting data to being really the AI factory for the world's biggest companies. As we're seeing a lot of businesses move past that experimental phase of AI, they need the massive scale that really these big tech companies can only provide. For Alphabet it's about those very high margin AI services that maybe could make Cloud as profitable as search. It's interesting to see with the chip wars and their custom TPUs, the place that they could play within this fight. Obviously, NVIDIA's GPUs are the industry gold standard. But Google is the only Cloud provider that has really successfully built its own top-tier AI silicone. I do think this gives them something of a vertical integration advantage that's potentially going to be really hard to beat. It avoids the so-called NVIDIA tax. They can offer those AI services at lower prices than competitors. Not about putting NVIDIA out of business, but it's really about creating, I think, for Alphabet and Google, a walled garden where they can run the world's most powerful models cheaper and more efficiently. That's something I'm really bullish on.

Travis Hoium: Lou, it does seem like they've used price as a weapon in the market to gain market share. The fascinating thing is, they seem to have lower prices for serving AI models and they have a pretty darn good margin at this point.

Lou Whiteman: As I said earlier, the Gemini versus Claude versus ChatGPT, that bores me. We'll see where that goes. But I do see the importance of AI, even if I don't know if having the winning model really matters, and they are the undisputed utility of AI, whatever it is. Whether it's capacity, whether it's chips, all these things. Look, they don't even have to be the best at this. I don't think it matters if NVIDIA chips are better than Alphabet's or if Alphabet's are better than NVIDIA's. NVIDIA is all about the chips. If they have the second-best offering in so many different areas of AI, they are going to win here, period. That's, I think, what matters. We can debate which AI is better, which chip is better, any of those. At the end of the day, they're going to sell these things. They're going to sell it. That is their advantage. They're not just one part of this system. They are everyewhere.

Travis Hoium: Who would have thought that in the early 2000s when they were buying up data centers on the chip and dark fiber, that would ultimately be one of the huge advantages in artificial intelligence. Taking those microseconds out of searches is now means they're serving artificial intelligence faster than most of their competitors right now. When we come back, we're going to get to some of the other hidden gems in Alphabet's portfolio. You're listening to Motley Fool Money. Welcome back to Motley Fool Money with the hidden gems team. Speaking of hidden gems, Rachel, there is this entire other bets business under Alphabet. That's why it's called Alphabet now and not Google. I wish they would just change it back, but that's neither here nor there. What hidden gems are you looking at in this portfolio that you're excited about?

Rachel Warren: I'm interested in the healthcare part of the business. Verily Health, it used to be Google Life Sciences and they rebranded a little while back. They're transitioning into an independent company. I think they raised about 300 billion in a recent funding round. It's all about AI-driven precision health research and care. Used to be really this hodgepodge of projects, like contact lenses at one point, but now Verily Health is really gearing to be a very focused AI native platform offering tools for research and clinical care, designed to really aggregate complex data, connect users with licensed clinicians, virtual care, coaching, medicinal management. Really interesting business. I think it's one that doesn't get as much attention, and it's certainly one that I'm keeping a close eye on because getting more into the world of digital care, I think, could be a real opportunity for the business.

Travis Hoium: If this becomes the place that we search, watch TV, and get our healthcare, I don't know. That's a lot of Google all in one place. Lou, what are you excited about?

Lou Whiteman: Maybe I'm in Atlanta, I see him all the time. Travis was just coming data, it's skinning. Every time I drive in Atlanta, I see four or five Waymos. They're either stalking me or there's an incredibly large number of Waymos on the road. I'm guessing it's the later, I'm not sure. But I'm guessing it's the later. Look, this is, I think, $120 billion plus business, just up from less than half of that in late 2024. Revenue run rate is still pretty low, but it's probably near 500 million or so approaching that.

Travis Hoium: They added Nashville, I believe, this morning. That was their 11th city that they have them.

Lou Whiteman: They just have a ton of cars out there. Look, this is going to be a public company, period. Google Alphabet is going to own a big part of that to the extent that they want it. I think that Waymo is the model for everything else they've done in other bets at this time. They have some other fun things we can talk about from delivery to advanced quantum and all of that, but not all of them are going to work out this well. If only one or two do, that's the venture capital model, and that is, again, all of that just ability to put cash into interesting projects. This is the payout. This is the happy ending.

Travis Hoium: Interestingly enough, my wife texted me this morning from downtown Minneapolis, saw her first Waymo, no driver. We are already at the point in Minneapolis where they've gone through all the testing. They've had the safety driver. I think that's the phases are pretty well known at this point. I wouldn't be surprised if here we're seeing fully commercialized operations this summer. If they're able to translate that then through the winter, that's where you get a massive addressable market because that opens up a lot more cities than they've had currently in the South. Lou, as far as Waymo goes, $126 billion valuation at a fundraising round of $16 billion earlier this year. If Waymo goes public, let's say three years from now, do they hit a trillion dollars, just Waymo?

Lou Whiteman: Who knows? Probably just the way things are moving.

Travis Hoium: Well, Tesla has been worth over a trillion dollars, and that was on the promise of FSD. They're actually scaling fully commercialized operations with autonomous vehicles.

Lou Whiteman: Travis, I'm not going to use Tesla's valuation as a comparison for anything. That's just a different animal. It's going to be big. It's going to go up from here. Inflation will do that to you. But there's a lot to be excited about that.

Travis Hoium: The other two things I'll mention quickly is they own somewhere between six and 10% of SpaceX. We'll figure that out if they go public in the next couple of months, so a couple hundred billion dollars, and they also own about 14% of Anthropic. Just hiding on the balance sheet, that's not to mention investments in companies like Stripe, huge VC arm, so several hundred billion dollars in value just in the equity in other companies for Alphabet as well.

As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows The Motley Fool's editorial standards, and is not approved by advertisers. Advertisements are sponsored content and provided for information purposes only. To see our full advertising disclosure, please check out our show notes. For Lou Whiteman, Rachel Warren, and Dan Boyd behind the glass, I'm Travis Hoium. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.

Lou Whiteman has no position in any of the stocks mentioned. Rachel Warren has positions in Alphabet. Travis Hoium has positions in Alphabet and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Microsoft, Netflix, Nvidia, Tesla, and Walt Disney. The Motley Fool has a disclosure policy.