Alphabet's valuation at 25x forward earnings is expensive relative to Buffett's historical investment criteria, raising questions about whether the investment aligns with proven value investing principles
Too little corroboration in the last 3 days to call a trend (3 articles). Watching for it to gain traction.
Alphabet's valuation at 25x forward earnings is expensive relative to historical value investing criteria, with sources noting that the stock's valuation multiples exceed the thresholds that have historically guided disciplined capital allocation. While fundamentals show 20% YOY revenue growth, adjusted EPS missed expectations, raising questions about valuation sustainability.
Valuation multiples that diverge from historical norms or peer averages create a persistent tension in investor positioning, as they determine the threshold at which growth disappointments trigger multiple compression. This dynamic can influence capital flows for extended periods, particularly if growth rates decelerate or if macro conditions shift toward higher discount rates.
"Fundamentals show a GAAP P/E of 17.41 and 20% YOY revenue growth, but adjusted EPS missed expectations; valuation remains demanding."
"Alphabet is already a $4.2 trillion behemoth. While GOOG stock could still deliver the goods, I don't expect it to be as profitable an investment for Berkshire considering the wonders Buffett achieved with Apple."
"the stock also costs 25x its next year's earnings — 'more expensive than Buffett likes' to bet on untested tech."