Welcome to “Stock of the Week”, a recurring series focused on companies experiencing meaningful news flow or changes in their investment case. The objective is not to react to headlines but to understand what is happening beneath the surface and whether recent developments materially affect the long-term investment thesis.
Each article applies the Quality Stocks Investment Framework to assess business quality, return potential and execution, in order to determine whether the stock is Attractive, Conditional, or Unattractive at the current price. A standardized one-pager accompanies each edition to make the decision process clear and easy to follow.
For paid subscribers, Stock of the Week goes a step further by opening up the full reasoning behind the investment thesis and decision process:
Detailed TSR calculations, including all underlying assumptions. This allows investors to understand what must go right for the investment to deliver acceptable returns and to stress-test their own expectations against explicit inputs
My analysis beyond the overall verdict. This provides a deeper insight, enabling investors to form an independent view rather than relying solely on a conclusion
This week’s spotlight is on Alphabet. On paper, Alphabet’s latest earnings report had everything a bull could ask for: accelerated revenue, blowout Cloud expansion and a double beat across top and bottom lines. Yet, by the market close, shares were down 7%. This post-results drop offers a fascinating window into current market sentiment, where massive AI CAPEX spending and paper-gain noise in headline numbers are overshadowing core operational strength. In this week’s deep dive, we look past the knee-jerk Wall Street reaction to separate headline noise from business reality and evaluate whether the market’s skepticism is creating a compelling opportunity for quality investors.
Missed an edition? Catch up on our recent analyses
One Pager
The stock at a glance
Want to understand how the Quality Stocks Investment Framework works? This article breaks it down for you
Data for this week’s analysis was sourced via MarketScreener. It is my go-to platform for global stock data and analyst price targets. If you are looking to upgrade your research toolkit, click here (Full disclosure: this is an affiliate link, so you will be supporting this newsletter at no extra cost to you!)
Recent news
Alphabet reported Q2 2026 consolidated revenues of $119.8B, marking a 24% YoY increase and the 12th consecutive quarter of double-digit growth
While headline net income surged to $112.1B due to a massive $98B net gain primarily from unrealized equity security valuations, the true core EPS stripped of these non-operating paper gains came in below Wall Street expectations ($2.85 vs $2.90)
Alphabet posted negative free cash flow of $(5.9B) for the quarter as capital expenditures ramped up aggressively to $44.9B, outpacing operating cash flow
Google Cloud revenue saw a massive acceleration, jumping 82% YoY to $24.8B with its contracted backlog swelling to over $500B
Google Search and other advertising revenue grew 17% to reach $63.3B, demonstrating steady core resilience despite minor variations against high street forecasts
Cyber and enterprise security divisions expanded rapidly following the integration of recent major acquisitions like Wiz alongside robust adoption of Gemini Enterprise tools across Fortune 100 companies
Waymo and other experimental ventures within the Other Bets segment continued commercial scaling, contributing $382M in quarterly revenue alongside an operating loss of $1.8B
Recent analyst recommendation updates
July, 23. keyBanc. Buy. $445 —> $435
July, 23. UBS. Hold. $400 —> $379
July, 23. Bernstein. Hold. $390 —> $385
July, 23. Oppenheimer. Buy. $445 —> $400
July, 23. Piper Sandler. Buy. $445 —> $395
July, 23. Morgan Stanley. Buy. $415 —> $400
July, 23. JP Morgan. Buy. $460 —> $420
To go beyond the initial assessment, paid subscribers unlock the detailed TSR calculation with underlying assumptions and my analysis of the situation, providing deeper insight into how recent developments affect risks, opportunities and the overall verdict
