Making Cents Sense

All financial figures and market prices in this article are based on information available as of August 26, 2026. This article reflects my personal analysis and is not individualized financial advice. When I look at Alphabet, I see one of the strangest valuation debates in the market. On one side, I see a company with dominant global platforms, extraordinary margins, rapidly growing cloud operations, a fortress-like balance sheet, and an advertising engine capable of producing tens of billions of dollars in cash every quarter. On the other side, I see an increasingly capital-intensive artificial intelligence race that is forcing Alphabet to spend money at a pace that would have sounded almost absurd a few years ago. Both versions of the company are real. That is what makes Alphabet difficult to value. It is no longer enough for me to say that Google Search is a great business and slap a historical price-to-earnings multiple on the stock. I have to determine how much of Alphabet’s curre...

Alphabet’s search business is still growing while artificial intelligence rewrites how people find information. The real investment question is not whether Google survives. It is what survival costs—and whether the new version of Search can remain as profitable as the old one. For most of my adult life, “Google it” has been less a suggestion than a reflex. I do not announce that I am about to use a search engine. I simply open a browser, type half a thought into a box, and expect the accumulated knowledge of civilization to arrange itself helpfully before I lose interest. Google became so embedded in daily behavior that its brand stopped functioning like a company name and started behaving like a verb, a utility, and occasionally a substitute for consulting a qualified physician. Then generative artificial intelligence arrived and asked an impolite question: What if people no longer want ten blue links? What if they want one direct answer? What if they ask ChatGPT, Perplexity, Claude, ...