Google Just Made a Deal with AI Coding Startup Replit. What Does That Mean for GOOGL Stock?

Company Overview - Replit, founded in 2016, operates on a freemium model combined with a high-growth usage-based enterprise model, generating revenue through three primary streams: vibe coding, subscription plans, and a marketplace [2] - The user base of Replit has grown significantly, reaching over 40 million by the end of 2025, up from 750,000 in 2016, with a current valuation of $3 billion following a $250 million fundraise in September [5] Vibe Coding and Partnership - Vibe coding allows users to describe project goals in natural language, enabling AI to generate functional code, thus democratizing coding [4] - Replit has partnered with Alphabet (Google) to enhance enterprise vibe coding, integrating Google's AI models into its platform to support this initiative [3][6] Financial Performance of Alphabet - Alphabet has shown strong financial growth, with a compound annual growth rate of 18.31% for revenue and 23.43% for earnings per share over the past decade [9] - In Q3 2025, Alphabet reported total revenue of $102.3 billion, reflecting a 16% year-over-year growth, with Google Services contributing $87.1 billion and Cloud revenue advancing 34% to $15.2 billion [10] - Search advertising generated $56.6 billion, a 14.5% increase from the previous year, and operating cash flow surged to $48.4 billion [11] Valuation Metrics - Valuation metrics for Alphabet have become stretched, with a forward price-to-earnings ratio of 30.58, price-to-sales at 9.69, and price-to-cash-flow at 24.69, all above their five-year averages [12] Analyst Ratings - Analysts have given Alphabet's stock a "Strong Buy" rating, with a mean target price of $324.88, indicating an upside potential of about 1.1% from current levels [13]