Alphabet stock still looking cheap: Opening Bid top takeaway

Sorry, trade deal tracker fans, you’ll have to take a back seat this morning for earnings analysis.

Tesla (TSLA) is the top trending ticker on Yahoo Finance as the EV maker delivered a weak quarter that everyone on the Street expected. What they didn’t expect was a subdued Elon Musk on the earnings call. A little less sizzle on the mic this go around for the prickly gazillionaire!

Then we have Alphabet (GOOG, GOOGL), which dropped the mic in its own right on Wednesday afternoon — but for the right reasons: bullish earnings call commentary on cloud demand and how it’s monetizing AI in its core search business. The company also lifted its capital expenditure for 2025 to $85 billion, a $10 billion jump from its previous forecast.

“What we see here is that AI spend is going absolutely nowhere but up,” Gradient Investments analyst Lisa Schreiber said on Opening Bid. “So, it’s still very strong, which is a very perfect backdrop for the rest of the hyperscalers, as [their earnings] are coming in over the next couple of weeks, that benefits even more parts of the industries.”

There are also peripheral reports in focus, such as IBM (IBM) and Chipotle (CMG). IBM had a good quarter. CFO Jim Kavanaugh tells me the company is finding more expense savings and is seeing sizable AI software demand. But the stock is getting hit.

Chipotle had an unsavory quarter, as sales surprisingly slowed. That stock is getting shredded.

“Markets digested a high-impact slate of earnings marked by extreme single-stock volatility, investors rewarding clean beats paired with credible guidance, punishing any signs of softness,” Evercore ISI strategist Julian Emanuel said.

For me, the main stock story on Opening Bid today was Alphabet. The numbers were so strong that one has to wonder why the stock didn’t gain more — especially considering shares trade at a discounted forward PE ratio relative to the S&P 500 (^GSPC).

Alphabet is trading at only 19.3 times forward earnings on a PE basis (S&P 500 is at 24 times), and the stock goes up just 2% on Thursday morning?

Did anyone listen to the earnings call? I did:

The company said revenue growth accelerated throughout the business.
Cloud business is rocking.
The company said it’s not losing key AI talent to the giant wallet of Meta (META).
The discussion around AI and search seems very bullish.
YouTube is crushing it.