20260430-招银国际-1Q26_results_beat_on_strong_search_and_cloud_businesses_AI_as_the_key_driver_6页_874kb

Alphabet (GOOG US) 1Q26 Summary

Core Content

Alphabet (GOOG US) reported its 1Q26 results, showcasing strong performance across its core businesses, particularly in search and cloud. The company's total revenue increased by 22% YoY to US$109.9 billion, surpassing the Bloomberg consensus. Operating income rose by 30% YoY to US$39.7 billion, also exceeding expectations. AI is identified as a key driver of growth, contributing to both increased search usage and improved monetization through enhanced ad relevance and campaign efficiency.

Main Points

• Revenue Growth:

  • 1Q26 revenue: US$109.9 billion (+22% YoY)
  • Search & other revenue: US$60.4 billion (+19% YoY)
  • YouTube ads revenue: US$9.9 billion (+11% YoY)
  • Google Cloud revenue: US$20.0 billion (+63% YoY)
  • AI features (e.g., AI Overviews, AI Mode) drove search queries to an all-time high.

• Monetization Improvements:

  • AI enhanced user intent understanding, improving ad relevance by ~10%
  • Over 30% of customer search spend now uses AI-enabled campaigns
  • AI created new ad formats and user experiences, unlocking monetization potential

• Capital Expenditure:

  • FY26 total capex guidance raised to US$180–190 billion (+97–108% YoY)
  • FY27 capex expected to be significantly higher than FY26
  • Higher depreciation expenses may impact P&L

• Profitability:

  • Operating profit margin improved to 36.1% in 1Q26 (+2.2ppts YoY)
  • Net profit margin increased to 36.4% in 1Q26
  • Adjusted net profit margin rose to 42.9% in 1Q26

• Earnings Forecasts:

  • FY26E revenue: US$482.4 billion (+4–12% from previous forecasts)
  • FY26E net profit: US$175.8 billion (+28.3% from previous estimates)
  • FY26E EPS: US$14.5 (+28.5% from previous estimates)

• Valuation:

  • Target price raised to US$425.0 from US$396.0
  • Based on a 35x FY26E P/E multiple, which is a premium to the sector average (17x)
  • Valuation per share: US$425.0
  • Adjusted net income for FY26E: US$147.082 billion

Key Figures

Revenue Growth (US$ billion)

• FY24A: 402.836
• FY25A: 482.445
• FY26E: 573.388
• FY27E: 669.624

Net Profit (US$ billion)

• FY24A: 132.170
• FY25A: 175.782
• FY26E: 172.962
• FY27E: 202.944

EPS (US$)

• FY24A: 14.53
• FY25A: 14.30
• FY26E: 16.77

P/E (x)

• FY24A: 23.9
• FY25A: 24.3
• FY26E: 20.7

Capex Guidance

• FY26E: US$180–190 billion
• FY27E: Expected to be significantly higher than FY26E

Cloud Backlog

• 1Q26: US$460 billion (nearly doubled QoQ)
• Expected to recognize ~50% over the next 24 months, supporting ~50% cloud revenue growth in FY26/27E

Analyst Recommendations

• Maintain BUY
• Target Price: US$425.00 (up from US$396.00)
• Up/Downside: 22.4%
• Current Price: US$347.31

Shareholding and Performance

• Market Cap: US$4.2 trillion
• Average 3-Month Trading Volume: US$4.3 billion
• 12-Month Price Performance:
  • Absolute: 23.2%
  • Relative: 18.5%

Share Performance

• Top Holders:
  • BlackRock: 3.4%
  • The Vanguard Group: 2.9%

Business Forecasts Update

Valuation Comparison

Analyst Certification

The research analyst certifies that the views expressed in this report reflect their personal opinions and that there is no direct or indirect compensation related to the specific views mentioned.

CMBIG Ratings

• BUY: Stock with potential return of over 15% over next 12 months
• HOLD: Stock with potential return of +15% to -10% over next 12 months
• SELL: Stock with potential loss of over 10% over next 12 months
• NOT RATED: Stock not rated by CMBIGM
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
• MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
• UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark

Important Disclosures

• Risks involved in trading any securities
• Information may not be suitable for all investors
• No individually tailored investment advice is provided
• Past performance does not guarantee future results
• CMBIGM is not liable for any loss, damage, or expense arising from reliance on the report
• Investors are encouraged to consult a professional financial advisor for investment decisions