Here's Why This May Be the Best "Magnificent Seven" Stock to Buy Now

Core Viewpoint - Alphabet's strong business momentum and robust cash generation appear sustainable, with current valuation offering potential upside [1] Group 1: Business Performance - Alphabet's shares are trading near all-time highs, benefiting from a recovery in advertising markets and rapid adoption of AI features [2] - The company is experiencing healthy growth across advertising, subscriptions, and cloud services, indicating it remains a compelling opportunity among the "Magnificent Seven" [3] - In Q2, revenue increased by 14% year-over-year to approximately $96.4 billion, driven by double-digit growth in Search, YouTube ads, subscriptions, and Google Cloud [5] Group 2: Financial Metrics - Operating income grew by 14%, while net income rose by 19%, supported by rising sales and effective cost management [5] - YouTube ad revenue increased by 13%, and the operating income from Google services rose by 11% [5] - Google Cloud revenue surged by 32% to about $13.6 billion, with operating income more than doubling to $2.8 billion, and operating margin expanding from 11.3% to 20.7% [7] Group 3: Investment and Cash Flow - Alphabet generated approximately $66.7 billion in free cash flow over the past twelve months and ended the quarter with around $95 billion in cash and marketable securities [9] - The company returned capital to shareholders through approximately $13.6 billion in share repurchases and $2.5 billion in dividends during the quarter, supported by a $70 billion buyback authorization [9] - Capital expenditures are expected to reach about $85 billion in 2025 to support AI infrastructure and capacity [8] Group 4: Valuation and Market Position - Alphabet shares are priced in the high-20s for price-to-earnings multiple, which appears attractive given the company's double-digit revenue growth and expanding Cloud margins [11] - The stock is seen as priced for solid execution rather than perfection, reflecting the company's robust nature [11] - Alphabet's combination of broad-based growth drivers, accelerating Cloud profitability, significant AI investment, and active share repurchases positions it as a strong candidate among the Magnificent Seven [12]