Prediction: Alphabet Stock Is a Buy Before June 2026

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) has done nothing but prove the bears wrong. The business, which critics previously thought had lost the artificial intelligence (AI) race, has produced a stellar return. Shares have skyrocketed roughly 130% just in the past 12 months (as of May 22).

Alphabet sports a colossal market cap of $4.6 trillion. This makes it the world's second-most-valuable enterprise, with Nvidia wearing the crown.

For a company that has lifted the portfolios of its shareholder base in remarkable fashion, there is still a lot of gas left in the tank. The show goes on, making this "Magnificent Seven" stock is a smart buy before June 2026.

Image source: The Motley Fool.

The business is firing on all cylinders

Despite constantly being in the spotlight, Alphabet continues to pleasantly surprise the market. This is exactly what it did on April 29 when it reported first quarter earnings.

Revenue surged 22% year over year to $109.9 billion, which beat Wall Street analyst estimates. This was the fastest rate of growth in 16 quarters.

Revenue at Google Search rose 19%. "We see AI Overviews and AI Mode continue to drive greater Search usage and growth in overall queries, including in commercial queries," Chief Business Officer Philipp Schindler said on the Q1 earnings call.

Ad revenue for popular streaming platform YouTube rose by almost 11%. And Waymo, Alphabet's autonomous driving segment, is now completing more than 500,000 rides per week.

Investors can't forget about Google Cloud, which is the clear star. This segment is really hitting its stride. Revenue jumped 63% year over year, faster than the increases of rivals Amazon Web Services and Microsoft Azure.

Google Cloud ended the first quarter with $462 billion in customer backlogs, almost doubling from three months before. Demand for AI products and services is as robust as ever.

Huge spending does present a potential risk

Investors are all too familiar with the vast amount of spending being directed to the AI infrastructure build-out. Alphabet is one of the leaders in this regard. Its capital expenditures (capex) totaled $91 billion in 2025. Management is targeting a whopping $180 billion to $190 billion this year.

The biggest risk hasn't faded just yet, however. Investors must remain critical of and pay close attention to the long-term returns of this unprecedented level of capex. Chief Financial Officer Anat Ashkenazi said that capex will "significantly increase" in 2027.

On a positive note, no rational market participant will deny that this company is a driving force in the AI boom. Alphabet is essentially involved in all phases of the game, from chip development (with its Tensor Processing Units, which are seeing strong demand) and Google Cloud to its Gemini large language models, user-facing apps, and advertising tools.

It's quite remarkable that at its scale, Alphabet is growing at the pace it is. I suspect that if there's a notable slowdown, the market would likely become more pessimistic about the stock quickly. Right now, though, there's little reason to worry.

What about the valuation?

Alphabet presents a worthwhile opportunity before June 2026, given the favorable trends already discussed. However, investors should also consider the valuation.

This booming tech stock doesn't trade at an outlandish price-to-earnings (P/E) ratio. While its P/E of 29.6 is 62% higher than a year ago, the fundamental momentum will make anyone bullish.

According to the average of analyst estimates, Alphabet's diluted earnings per share are projected to increase at a compound annual rate of almost 17% between 2025 and 2028. This outlook could certainly come up short, as forecasts have generally gone up thanks to the company's impressive performance and profit gains.

Alphabet has been on an incredible run. Investors who buy the stock before June 2026 are sure to benefit.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.