Is Alphabet Still a Buy at $330? Evaluating the Case for Long-Term Growth

Alphabet Inc. (GOOGL), the parent company of Google, has long been a cornerstone of the technology sector, but its valuation and strategic direction remain hotly debated. As the stock trades near $319.74 as of November 26, 2025, the question of whether $330 represents a compelling entry point for long-term investors hinges on its ability to sustain growth in AI, cloud computing, and digital advertising while navigating regulatory headwinds. This analysis examines Alphabet's financial performance, market positioning, and valuation to determine if it still warrants a strategic hold in a high-conviction tech portfolio.

Financial Performance: A Foundation of Resilient Growth

Alphabet's Q3 2025 results underscore its enduring strength. Consolidated revenues surged 16% year-over-year to $102.3 billion, with Google Cloud emerging as a standout performer. The cloud segment reported a 34% revenue increase to $15.2 billion, driven by demand for AI infrastructure and generative AI solutions. This growth has positioned Google Cloud as a direct competitor to YouTube in terms of revenue contribution, reflecting a strategic pivot toward enterprise and AI-driven services.

R&D investments also rose by 16% in 2025, with a focus on AI innovation and custom-built tensor processing units (TPUs) to support enterprise clients according to industry reports. Meanwhile, capital expenditures are projected to reach $91–$93 billion in 2025, underscoring Alphabet's commitment to scaling its infrastructure for AI and autonomous vehicle projects like Waymo according to earnings analysis. These investments, while costly in the short term, signal confidence in long-term returns.

Market Position: AI and Cloud as Growth Catalysts

Alphabet's market share in cloud computing has expanded from 10% in Q1 2023 to 12% in Q1 2025 according to market analysis, challenging industry leaders like Amazon and Microsoft. This growth is fueled by its full-stack AI strategy, including the Gemini model and AI-integrated cloud services according to financial reports. Notably, Alphabet's market capitalization reached $3.9 trillion in 2025, surpassing Microsoft's $3.6 trillion, as investors bet on its AI-driven ecosystem spanning YouTube, Google Search, and Waymo.

However, competition is intensifying. Microsoft's Copilot and OpenAI partnerships remain formidable, while regulatory scrutiny in the U.S. and Europe could temper growth. Despite these challenges, Alphabet's ability to integrate AI across its platforms-such as enhancing Google Search with generative AI-positions it to capture incremental market share according to market analysis.

Regulatory Risks: Navigating a Complex Landscape

Alphabet's legal battles in 2025 highlight the regulatory risks it faces. A U.S. court mandated behavioral remedies for antitrust concerns, requiring the company to eliminate exclusive default search agreements and share its search index with competitors. In Europe, the Digital Markets Act (DMA) threatens substantial fines for noncompliance. While these measures avoid a structural breakup, they could erode short-term margins and complicate expansion in key markets.

That said, Alphabet's strategic flexibility-such as pivoting to AI-driven services-mitigates some of these risks. The company's focus on innovation ensures it remains a dominant player even as regulators tighten oversight.

Valuation: Justified by Growth Expectations

Alphabet's forward P/E ratio of 28.01 as of December 2025 exceeds the industry average of 20.08 according to market data, reflecting elevated expectations for earnings growth. Analysts project a 6% increase in 2026 earnings per share (EPS) to $11.24, with a compound annual growth rate (CAGR) of 16.7% anticipated between 2024 and 2027 according to financial projections. A median price target of $334 from analysts according to market research suggests the market believes Alphabet can justify its valuation through sustained innovation.

While the stock trades above its five-year average forward P/E of 26.8x according to financial data, its projected long-term growth-particularly in AI and cloud-justifies the premium. If current trends persist, Alphabet could reach a $5 trillion market cap by 2028 according to market forecasts, driven by its AI infrastructure and expanding enterprise offerings.

Conclusion: A Strategic Buy for Long-Term Compounding

Alphabet's trajectory as a tech leader remains intact, with AI and cloud computing serving as its primary growth engines. While regulatory risks and competitive pressures persist, the company's financial strength, R&D focus, and ecosystem integration position it to outperform in the long term. At $330, the stock offers a modest premium to its current price but aligns with analysts' price targets and growth projections. For investors seeking compounding from high-conviction tech holdings, Alphabet remains a compelling strategic buy-provided they maintain a long-term horizon and tolerance for near-term volatility.