Google stock may be undervalued based on the company’s ambitions, analyst says

Shares of Google-parent Alphabet (GOOG) have significantly underperformed the broader market this year - a trend one analyst says is unlikely to persist given the tech giant’s leadership in several emerging technologies.

Joseph Carlson, a stock analyst and host of The Joseph Carlson Show, recently highlighted Google’s leadership in driverless vehicles, digital video, cloud computing, and digital advertising.

“Waymo plans to double its fleet from 1,500 to 3,000 by the end of next year. YouTube does more viewership time on TV than Netflix. Google Cloud is growing 30% YOY. Google ads on search continue to grow above 10%,” he said.

Waymo plans to double it's fleet from 1,500 to 3,000 by the end of next year.

YouTube does more viewership time on TV than Netflix.

Google Cloud is growing 30% YoY

Google ads on search continue to grow above 10%

Google meanwhile trades at a 19 PE ratio. pic.twitter.com/UFtSnp11tJ

undefined Joseph Carlson (@joecarlsonshow) June 26, 2025

Meanwhile, GOOG shares trade at a price-to-earnings ratio of 19, which is well below the average for the S&P 500 Information Technology sector, according to industry data.

Based on Carlson’s analysis, GOOG may be undervalued at current levels.

That might seem surprising to investors given Alphabet’s massive $2.1 trillion market capitalization, which makes it the world’s fifth most valuable public company. Still, GOOG shares have declined by 8% year-to-date and remain negative over the past 12 months.

By contrast, the S&P 500 Index has turned positive for 2025, gaining 5% so far to reach record highs. The benchmark index is up more than 12% over the past year.

Is Alphabet the future of driverless cars?

Carlson’s analysis of Alphabet’s Waymo was echoed in a June 12 report by Investors Observer, which argued that Alphabet — not Tesla — is leading the shift to driverless vehicles through the rise of its robo-taxi service.

At the time, Investors Observer reported that Waymo provided 700,000 paid rides in California in March - a tenfold increase in less than a year.

Adding to those efforts, Waymo’s driverless cars launched in Atlanta last week following an expanded partnership with ride-hailing platform Uber. The vehicles now cover approximately 65 square miles in the city. This follows the successful rollout in Austin, Texas, earlier this year.

While Waymo’s exact revenue contribution isn’t disclosed, the business is part of Alphabet’s “Other Bets” category, which generated $450 million in the first quarter.

This segment will be closely watched by investors when Alphabet releases its next quarterly earnings report, which is expected in late July.

Alphabet reported first-quarter revenue of $90.23 billion and earnings of $2.81 per share. Despite growing competition from AI, the company’s search and advertising businesses continued to show strong growth. This included better-than-expected YouTube advertising revenue.