Google Stock: The Unstoppable Cash Engine

Core Insights - Google has returned $343 billion to shareholders over the last decade through dividends and buybacks, driven by its dominance in the digital advertising market, which generated $264.6 billion in advertising revenue in 2024, accounting for 75.6% of its total revenue of $350 billion [2][3] - The company's business model is highly cash-generative due to minimal marginal costs associated with digital advertising, resulting in a net income of $100.1 billion for 2024 [3] - Google Cloud has become a significant cash contributor, generating $43.2 billion in 2024, benefiting from the shift of enterprises to AI-powered cloud services [4] Financial Performance - Google's search advertising revenue reached $198.1 billion in 2024, while YouTube contributed $36.1 billion, showcasing the strength of its advertising platforms [2] - The company maintains a free cash flow margin of nearly 18.0% and an operating margin of 32.7% in the last twelve months [11] - Revenue growth for Google was 13.1% in the last twelve months, with a three-year average growth rate of 10.2% [11] Market Position - Google stock has returned the third highest amount to shareholders in history, indicating strong management confidence in the company's financial health [6] - The total capital returned to shareholders as a percentage of market cap appears inversely proportional to growth prospects for reinvestments, with companies like Meta and Microsoft showing faster growth but lower capital returns [8] - Alphabet stock trades at a P/E multiple of 26.6, offering higher valuation, revenue growth, and better margins compared to the S&P [11]