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Back of Napkin

Alphabet Inc. GOOGL

Three-pass checkedFresh as companies report

Alphabet reported $112.1B of net income in a single quarter. Ninety-nine billion of it was writing up private shareholdings, mostly SpaceX.

Underneath, Google Cloud grew 82% and its operating income tripled to $8.81B, which is the number that actually changed.

GOOGL · price with moving averages

Daily · 6MWeekly · 3Y
$95$177$259$341$423 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Alphabet sells advertising against intent. Somebody searches for something, and a business pays to appear. That is $63.3B a quarter from Search and another $11.1B from YouTube, and it remains one of the best businesses ever constructed.

Google Cloud rents computing and sells the Gemini models. Other Bets, mostly Waymo, loses $1.80B a quarter.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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