## **Pros:** ✅ **Search Engine Dominance:** Google’s search engine commands over 90% global market share, driving massive ad revenue that forms a stable, high-margin cash cow. The increase in online users and usage benefits Google. ✅ **Safe Business Model:** Alphabet’s products like YouTube, Android, and Chrome create a vast ecosystem, locking in users and advertisers across multiple platforms worldwide. By collecting data on users' search queries, the company monetise it to companies interested in targeted digital advertising, often more efficient than “traditional ” marketing campaigns. ✅ **Gemini AI Rapid Expansion:** Alphabet has accelerated the rollout of its Gemini AI models across search, Android devices and enterprise services. Gemini has reached hundreds of millions of users and is increasingly integrated across Google products, strengthening Alphabet’s position in the AI race. Alphabet was also named Apple's preferred Cloud partner to develop next-generation Foundation Models based on Gemini. ✅ **Search Products AI Integration:** Google has increasingly integrated AI generated answers and tools directly into its search engine. This allows the company to maintain its leadership in information access while adapting to the rise of generative AI assistants. ✅ **Growing Cloud Segment:** Google Cloud continues to expand as companies increasingly adopt AI infrastructure and cloud computing. Alphabet is positioning its AI models and cloud services as a key platform for enterprise AI development. ✅ **Smartphone Dominance:** Android is the world's most used smartphone operating system and secures Google's mobile search control. ✅ **Financial Health:** Huge profits, high margins, strong cash flows generation and exemplary capital allocation, supports sustained investment in growth and shareholder returns through share repurchases. The company appears fundamentally undervalued. ✅ **Tariff Impacts:** Alphabet’s business is largely digital, with limited reliance on physical goods, shielding it from tariff-related cost increases. Any tariffs on hardware like Pixel phones would have a negligible effect due to their small revenue share. ## **Cons:** ❌ **Ad Revenue Dependence:** Despite diversification efforts, advertising accounts for roughly 75% of revenue, making Alphabet sensitive to economic downturns that reduce corporate ad budgets. ❌ **AI-Threat:** Alphabet faces intense competition in AI from companies such as Microsoft, OpenAI, Amazon and Meta. The rapid pace of innovation in AI means Alphabet must continue investing heavily to maintain its technological leadership. In addition, the use of external chatbots is threatening Google Search and consequently the whole company. ❌ **Huge CapEx Bet:** Alphabet plans to spend between $175 and $185 billion in CapEx in 2026, more than double the $91.4 billion spent in 2025. Roughly 60% goes to servers and 40% to data centers and networking. The return on investment is real but will take time to materialize. ❌ **Antitrust Regulations:** Alphabet faces increasing scrutiny from regulators worldwide, posing risks to its business operations and constraints its monopoly in online search. ❌ **Data Privacy Concerns:** As a data-centric company, Alphabet face growing concerns over data privacy and security, essential for sustaining user trust and compliance with evolving regulations. ❌ **Ventures Investments:** The company's allocation of substantial resources to high-risk ventures, carries the risk of low returns on investment.