Was Jim Cramer Right About Alphabet Inc. (GOOGL)?

Alphabet’s Journey Through Cramer’s Lenses: A Tale of Timing and Tech Dominance

Jim Cramer, the fiery host of Mad Money, has long been a bellwether for retail investors. But when it comes to alphabet (GOOGL), his recommendations have oscillated between cautious skepticism and grudging admiration. Let’s dissect whether Cramer’s calls on Alphabet—from his 2023 sale to his later regrets—were justified.

The 2023 Crossroads: Support, Sale, and Regret

Alphabet’s stock began 2023 with a 14.5% year-to-date decline, sparking fears of a broader tech slowdown. Yet by April 2023, the stock rebounded 4.3% after Alphabet’s Q1 earnings beat expectations, driven by surging ad revenue and optimism around AI investments. Cramer praised Alphabet’s “robust tech platforms” and ranked it first among stocks he discussed, citing its search, YouTube, and cloud dominance.

Ask Aime: Did Jim Cramer's early sale of Alphabet prove costly?

But just weeks later, Cramer sold his position. His concerns were twofold:
1. Antitrust Risks: Ongoing lawsuits alleging Google’s monopolistic grip on search and online ads.
2. AI Cannibalization Fears: Worries that tools like Gemini (its chatbot) might divert users from Google Search, threatening its $200 billion ad revenue.

Reality Check:
The stock rose 7% in the weeks following his sale—a stark rebuttal to his bearish stance. By Q1 2024, Cramer admitted his mistake. Alphabet’s ad revenue had held firm, YouTube’s growth remained robust, and AI partnerships (e.g., with NVIDIA) proved synergistic rather than disruptive. He acknowledged Alphabet’s undervaluation at 16x forward earnings—a figure he called “irrational” given its cash reserves ($95 billion) and innovation pipeline.

Ask Aime: "Was Cramer's Alphabet sell justified?"

2024–2025: Regulatory Battles and AI’s Double-Edged Sword

Cramer’s 2023 concerns weren’t entirely unfounded. Antitrust lawsuits dragged on, and Alphabet’s shares faced headwinds in 2024 as broader tech stocks stumbled. Yet hedge funds remained bullish: by Q4 2024, 234 funds held the stock—a testament to its institutional appeal.

Cramer also grappled with AI’s evolving role. While he highlighted “the cheapest AI stock” outperforming Alphabet by 25% since early 2025, he conceded that Alphabet’s core strengths—Search, YouTube, and Waymo’s robotaxi expansion—were irreplaceable. AI, he noted, had become a “complement, not a competitor,” boosting ad relevance and cloud services.

The Data Speaks: Valuation and Resilience

Alphabet’s stock price tells a story of resilience amid uncertainty:
- 2023 Rally: After Cramer’s sale, GOOGL rose 7% in a month, then climbed another 18% by year-end.
- 2024 Volatility: Shares dipped 6% in Q3 2024 amid macroeconomic fears but stabilized as AI adoption surged.
- 2025 Outperformance: While niche AI stocks surged, Alphabet’s diversified revenue streams (advertising, cloud, hardware) kept its valuation grounded—yet growing.

Cramer’s regret stemmed not from his concerns but their timing. Regulatory risks, while real, failed to derail Alphabet’s cash flows. Meanwhile, AI’s disruption proved manageable, with Gemini and cloud partnerships enhancing—not eroding—its ad-driven empire.

Conclusion: Cramer Was Half-Right—And That’s the Point

Jim Cramer’s Alphabet story underscores a timeless investing lesson: Great companies often outlast short-term fears.

• Where He Was Right:
• Antitrust risks are valid but manageable. Alphabet’s 2022 search monopolization ruling is on appeal, and its $95 billion cash cushion buys time to navigate legal hurdles.

• AI’s potential to disrupt is real, but Alphabet’s integration of AI into core businesses (e.g., Gemini boosting search relevance) shows adaptability.

• Where He Was Wrong:

• Selling in March 2023 was premature. The stock’s 7% rebound post-sale and 16x forward P/E (vs. peers’ 25x+) signaled undervaluation.
• Overestimating AI’s cannibalization threat. YouTube’s ad revenue grew 12% in 2024, proving that AI complements—not replaces—Alphabet’s crown jewels.

The verdict? Cramer’s analysis was insightful but his timing misfired. Alphabet’s dominance in search, video, and AI—backed by $200 billion in annual revenue and a fortress balance sheet—makes it a “buy-and-hold” story. As Cramer himself might say: “Don’t let fear sell you out of a great company.”

In the end, Alphabet’s stock performance and institutional support prove that even when the “Mad Money” host is wrong, the market often has the last word.