<div id="readability-page-1">Wall Street's least favorite &#34;Magnificent Seven&#34; stock may be Alphabet (GOOG 3.02%) (GOOGL 3.24%) right now if its price-to-earnings (P/E) ratio is any indicator. The large technology company -- and parent of Google -- is leaping forward into the artificial intelligence (AI) revolution with open arms, growing revenue at a double-digit rate, and seeing an earnings inflection at its cloud division. And yet, it trades at the cheapest P/E ratio of all of its large-cap technology stocks brethren. Let's dive in and analyze the parent company of Google, Gemini, YouTube, and Google Cloud and see whether this discounted earnings ratio makes the stock a buy right now. <h2>Strong fundamental growth</h2> There is a huge narrative around Alphabet and Google losing in AI to the likes of OpenAI. So far, this has not shown up in Alphabet's financial performance. Last quarter, Alphabet's revenue grew 14% year over year in constant currency to $90.2 billion, with 10% growth from Google Search revenue that is supposedly being disrupted by AI start-ups. So far, that hasn't been the case with Alphabet. With a plethora of new AI products hitting the market including Gemini language upgrades, video tools, and a host of productivity and consumer shopping functions, Alphabet is staying on the cutting edge while still generating tons of revenue from Google Search. Over the last 12 months, Alphabet's revenue was $360 billion, up 117% cumulatively in the last five years. This is not just from Google Search, either. YouTube advertising, subscriptions, and Google Cloud each generate around $10 billion in quarterly revenue and are growing revenue at a double-digit rate. This diversification of revenue should help Alphabet maintain its financial momentum even if Google Search does get disrupted as some investors fear. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjA4MDUvZmluZ2Vycy1vbi1jaGluLWxvb2tpbmctdXAtdGhpbmtpbmctY29uc2lkZXJpbmctd29uZGVyaW5nLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="467" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjA4MDUvZmluZ2Vycy1vbi1jaGluLWxvb2tpbmctdXAtdGhpbmtpbmctY29uc2lkZXJpbmctd29uZGVyaW5nLmpwZyZ3PTcwMA"/>Image source: Getty Images. </div> <h2>Earnings help from Google Cloud</h2> The crown jewel of Alphabet's business right now is Google Cloud. Growing revenue at 28% year over year, the division is benefiting greatly from the rising demand from AI start-ups to host their computing in the cloud. A leader in the space, Google Cloud is closing in on $50 billion in annual recurring revenue with a long runway to grow. For years, Google Cloud had negative operating earnings. Now, it is seeing a huge profit inflection that will be meaningful to Alphabet's consolidated bottom line. Google Cloud's operating income was $2.2 billion in the first quarter of 2025, giving it a profit margin of 18%. If cloud revenue can hit $100 billion annually within a few years while profit margins expand to 25%, that will equate to $25 billion in annual operating income from the division for Alphabet. For reference, Alphabet's total operating income was $117.5 billion over the last 12 months, meaning that Google Cloud is an increasingly important part of the company's growth story. As long as the AI spending boom continues, Google Cloud's revenue will likely continue to grow as well. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/c34d9bd54a8363e25bdc5bf1a8778608.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="473" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/c34d9bd54a8363e25bdc5bf1a8778608.png"/> GOOG PE Ratio data by YCharts <h2>Why Alphabet is the cheapest Magnificent Seven stock</h2> Alphabet looks like the cheapest Magnificent Seven stock to buy for multiple reasons. For one, it is growing faster from a revenue perspective than some of its peers such as Apple and Tesla. Second, Alphabet's trailing P/E ratio is much lower than the Magnificent Seven peers that are growing revenue at a fast clip. Alphabet has a P/E ratio of 18.9, versus 26.7 for Meta Platforms and 36 for Microsoft, even though Alphabet's revenue is growing at a similar rate. Neither of these competitors has a division like Google Cloud that is appreciating such a rapid earnings inflection at the moment, either. To put the cherry on top, Alphabet's management team has been one of the best among the Magnificent Seven in returning capital to shareholders. The stock now has a dividend yielding 0.5%, and the company keeps plowing cash into share repurchases even as it rapidly lays out capital expenditures for its AI infrastructure and future Google Cloud growth. This is a rare combination in public markets: a cheap stock, fast growth, and strong capital returns to shareholders through buybacks and dividends. A recipe like this makes Alphabet one of the best stocks to buy right now and the cheapest Magnificent Seven today. </div>

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Alphabet (GOOG) is currently considered the cheapest stock among the "Magnificent Seven" due to its low price-to-earnings (P/E) ratio of 18.9, despite strong revenue growth of 14% year-over-year. The company is thriving in the AI sector, with Google Cloud revenue growing at 28% and contributing significantly to profits. Alphabet's diversified revenue streams, including YouTube and Google Cloud, position it well for future growth. Additionally, the company is committed to returning capital to shareholders through dividends and share repurchases, making it an attractive investment opportunity.

- Alphabet (GOOG) is currently trading at the lowest P/E ratio among the "Magnificent Seven" tech stocks, despite strong revenue growth and an earnings inflection in its Google Cloud division.  
- The company reported a 14% year-over-year revenue increase, reaching $90.2 billion, with significant contributions from Google Search, YouTube, and Google Cloud, which is growing at 28% annually.  
- With a P/E ratio of 18.9, lower than competitors like Meta and Microsoft, and a commitment to returning capital to shareholders, Alphabet is positioned as an attractive investment opportunity.  

Is Google the Cheapest "Magnificent Seven" Stock You Can Buy Today?