Alphabet (GOOGL Quick QuoteGOOGL - Free Report) just logged its strongest monthly gain – nearly 34% -- since its early days as a newly public company. Now, Alphabet has delivered its best performance since November 2004, echoing that early surge, as quoted on CNBC. The rally underscored April’s broader tech resurgence, where megacaps once again led the market momentum.

Alphabet Surges on Strong Earnings

Alphabet Inc. shares jumped sharply on Thursday after the company delivered better-than-expected results, powered by robust cloud growth. The company exceeded first-quarter revenue estimates, supported by a surge in its cloud business.

Google Cloud posted an impressive 63% year-over-year revenue increase. CEO Sundar Pichai attributed this growth to rising demand for enterprise AI solutions, as quoted on CNBC.

Capex Outlook Raised on AI Push

Reflecting its aggressive AI ambitions, Alphabet raised its capital expenditure forecast for the year to between $180 billion and $190 billion, up from the earlier range of $175 billion to $185 billion. The company expects the company’s 2027 CapEx to “significantly increase” compared to 2026.

AI Still Leading the Market

The AI investment cycle is still gaining momentum. Alphabet’s stock soared 34% in April—its biggest monthly gain since shortly after its IPO—underscoring continued investor enthusiasm for AI-driven growth.

Analysts Upped Estimates

Five out of 13 analysts raised their earnings estimates for the June quarter over the past week. Zacks Consensus Estimate for Earnings has been upped from $2.80 to $2.86 (which is up 23.81% year over year) for the June quarter over the past seven days. Zacks Consensus Estimate for sales for the June quarter is $100 billion, up 22.41% year over year.

Inside Valuation

Alphabet shares trade at a Price/Earnings (TTM) of 29.42X versus the 44.98X P/E possessed by the underlying Internet - Services industry. While this multiple is compelling, Alphabet shares trade at a price/cash flow (most recent fiscal year) of 30.43X versus the industry multiple of 10.36, which shows that the GOOGL shares are pricier in this context. Price/book (most recent quarter) multiple of the GOOGL shares is currently 9.75X, much higher than the industry average of 1.31X.

Any Wall of Worry?

Alphabet’s P/B and P/CF ratios show why so-called cash-rich Big Tech companies are now relying on debt to fund their AI dreams. These companies are now engaged in a debt-funded push to build AI infrastructure, moving away from their age-old model of financing growth through cash on hand.

Big Tech is expected to shell out more than $600 billion on AI in 2026, ???a sharp increase from $410 billion in 2025, as quoted on Reuters. In 2025, major technology "hyperscalers" issued a record $121 billion in corporate debt to fund massive AI infrastructure and data center projects (per Mellon Investments).

The AI boom has now entered a "more ‌dangerous phase", due to rising investments in physical infrastructure and growing dependence on external capital, according to an analysis by Bridgewater Associates released in late 2025, as quoted on Reuters.

ETFs in Focus

Against the backdrop where the AI boom and cloud growth put Alphabet in a sweet spot while debt worries spark questions, investors can take the basket or ETF approach to play the stock. Note that Alphabet has issued a rare 100-year bond as part of a roughly $32 billion multi-currency debt offering in late 2026, as quoted on Global Finance.

Alphabet-heavy ETFs include Global X PureCap MSCI Communication Services ETF (GXPC Quick QuoteGXPC - Free Report) , Grizzle Growth ETF (DAPP Quick QuoteDAPP - Free Report) , VanEck Communication Services TruSector ETF (TRUC Quick QuoteTRUC - Free Report) and Fidelity MSCI Communication Services Index ETF (FCOM Quick QuoteFCOM - Free Report) . The ETF approach minimizes company-specific concentration risks.