Why Alphabet (GOOG) Is Still Worth Holding: A Long-Term Investor's View

In a world filled with meme stocks, thematic rotations, and moonshots, Alphabet Inc. (GOOG) remains a quietly powerful compounding machine. For investors with a long-term horizon, the company's blend of scale, resilience, and optionality makes it an enduring core holding.

Executive Summary: Why Alphabet Deserves a Closer Look

Alphabet (GOOG) is arguably one of the most dominant technology firms in the world, with entrenched positions across digital advertising, search, cloud, and AI. Despite its scale, the company continues to grow revenue at a mid-teen rate, while maintaining high operating margins and massive free cash flows.

Trading at a forward P/E of around 19× and a free cash flow multiple around 35×, Alphabet may not screen as “cheap” on the surface, but it offers a compelling mix of quality, growth, and downside protection. Its competitive advantages remain among the widest in global markets, and it has the balance sheet strength to invest through downturns, buy back stock aggressively, and still retain dry powder.

With a conservative intrinsic valuation suggesting the stock is modestly over fair value, Alphabet may not offer a traditional Graham-style margin of safety. But for those focused on Buffett’s mantra, “a wonderful company at a fair price” it still qualifies as a highly attractive long-term holding.

Investment Thesis: A Fortress Business at a Fair Price

Alphabet Inc. (GOOG) is a textbook example of a dominant, high-quality business with multiple engines of growth, a deep and defensible moat, and exceptional financial discipline. While it may not appear undervalued in a classic Ben Graham sense, it offers what Warren Buffett would call a "great company at a fair price."

Why It’s Compelling:

• Valuation: Alphabet trades at 19× forward earnings and 35× free cash flow. These are not deep value levels, but they're reasonable for a business of this quality. A conservative DCF model places intrinsic value slightly below current price, but with meaningful upside in a bull case.

• Moat: The company has an incredibly wide moat supported by brand strength, AI capabilities, scale, data, and entrenched platform effects.

• Growth: With major growth engines like AI (Gemini), Cloud (Google Cloud), YouTube monetization, and Pixel hardware, Alphabet is still innovating and expanding into high-margin segments.

• Downside Protection: With over $95B in cash, minimal debt, and $60B+ in annual free cash flow, Alphabet can weather macro headwinds, regulatory hurdles, and competition.

Would I Be Happy to Hold This for 10+ Years?

Yes. Alphabet offers the trifecta that long-term value investors seek: durable earnings, wide moat, and intelligent reinvestment. While it may not deliver explosive returns from current levels, it can still compound at mid-to-high single digits annually, with upside torque from AI and cloud monetization.

I’ve broken it all down in a free 20-page Buffett-style report.

Download here: https://www.thevalueinvestor.co.uk/about-5-2

Disclaimer: This is not financial advice. Please do your own research or consult a licensed professional before making investment decisions.