Alphabet Inc. (GOOGL)vs SMCI Holdings, Inc. (SMCI)

Quick verdict

Based on the supplied data, GOOGL and SMCI differ substantially across most metrics. GOOGL shows a trailing P/E of 27.15, forward P/E of 12.86, and PEG of 0.59, supported by a 37.91% net margin and 38.98% ROE. SMCI records a P/E of 0 (not meaningful), a P/B of 2.94, negative net margin of -7.89%, and negative ROE of -18.28%, alongside a -4.3% three-year revenue CAGR. Growth and quality verdicts both favour GOOGL, while balance sheet and income verdicts favour SMCI, reflecting SMCI's higher dividend yield (3.17% vs 0.24%) and net cash position (net debt/EBITDA of -0.86 vs GOOGL's 2.61). The valuation category is scored a tie. Momentum data shows GOOGL's YTD return of 51.74% ahead of SMCI's 23.16%. Overall scores of 3.5 versus 2.5 summarise these differences; this content is informational only.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

GOOGL operates as Alphabet Inc., providing internet content and information products and digital platforms across North and South America, Europe, the Middle East, Africa, and Asia-Pacific, per its short description. SMCI is described in the supplied data under the Healthcare sector, Drug Manufacturers industry, with a short description noting operations 'in the drug manufacturers space within the healthcare sector.' The two companies' listed sectors (Communication Services vs Healthcare) and industries (Internet Content & Information vs Drug Manufacturers) differ entirely per the dataset provided, making direct business-model comparison limited to the financial metrics available rather than operational overlap.

Valuation

The valuation verdict between the two is scored a tie. GOOGL trades at a trailing P/E of 27.15 and a forward P/E of 12.86, implying anticipated earnings growth is priced in, reinforced by a PEG ratio of 0.59. Its P/S ratio stands at 10.29 and P/B at 9.09, with an EV/EBITDA of 20.11. SMCI shows a P/E of 0 (not meaningful given negative earnings), a lower P/B of 2.94, and P/S of 19.57 — notably higher than GOOGL's on a sales basis. SMCI's PEG is listed as 0, reflecting the absence of a meaningful earnings growth rate to pair with valuation. FCF yield is 1.53% for GOOGL versus 0.61% for SMCI.

Growth profile

Growth verdict favours GOOGL (rated A). GOOGL's three-year revenue CAGR stands at 15.13% and five-year revenue CAGR at 11.26%, with EPS CAGR of 34.19% over three years and 17.07% over five years. SMCI's figures show contraction across the board: a three-year revenue CAGR of -4.3%, five-year revenue CAGR of -4.43%, three-year EPS CAGR of -5.59%, and five-year EPS CAGR of -2.88%. Based strictly on these figures, GOOGL has demonstrated sustained top-line and bottom-line expansion over the periods measured, while SMCI's corresponding figures indicate a decline in both revenue and earnings over the same three- and five-year windows.

Profitability and quality

Quality verdict favours GOOGL (rated A). GOOGL reports a gross margin of 60.37%, operating margin of 32.7%, and net margin of 37.91%, with ROE of 38.98% and ROIC of 19.21%. SMCI's gross margin is 33.7%, but its operating margin is negative at -12.96% and net margin negative at -7.89%, with ROE of -18.28% and ROIC of -5.07%. These figures indicate GOOGL converted a materially larger share of revenue into profit across all measured margin lines, while SMCI's operating and net margins, along with ROE and ROIC, were negative according to the supplied data for the period covered.

Balance-sheet risk

Balance sheet verdict favours SMCI (rated B, ahead of GOOGL's comparative position in this category). SMCI holds cash of approximately $34.99 billion against total debt of approximately $29.82 billion, producing a net-debt-to-EBITDA ratio of -0.86, indicating a net cash position. GOOGL holds cash of approximately $22.62 billion versus total debt of approximately $34.01 billion, with a net-debt-to-EBITDA ratio of 2.61. SMCI's current ratio of 2.88 exceeds GOOGL's 1.92, and SMCI's interest coverage of 43.56 is marginally higher than GOOGL's 41.2. Both companies show current ratios above 1.9 and strong interest coverage, though SMCI's net cash position contrasts with GOOGL's net debt figure.

Price performance and shareholder returns

Momentum verdict favours GOOGL (rated A). GOOGL's year-to-date return is 51.74% and one-year return is 28.87%, though its three-year annualised return is -3.59%, with a five-year annualised return of 25.98% and maximum five-year drawdown of -21.89%. SMCI's year-to-date return is 23.16%, one-year return is -1.45%, three-year annualised return is 0.78%, five-year annualised return is 32.67%, and maximum five-year drawdown is -26.29%. GOOGL's beta of 1.247 is lower than SMCI's 1.65, suggesting greater historical price sensitivity for SMCI based on the supplied figures, while SMCI's five-year annualised return figure exceeds GOOGL's over that specific window.

Which stock fits which investor

Per the supplied bestFor mapping, GOOGL is identified as best suited to those prioritising growth and quality factors, consistent with its A ratings in both categories, its 34.19% three-year EPS CAGR, and 38.98% ROE. SMCI is identified as best suited to those prioritising value and income factors, consistent with its B balanceSheet and income verdicts, its net cash position (net-debt-to-EBITDA of -0.86), dividend yield of 3.17%, and lower P/B of 2.94. The overall scores of 3.5 for GOOGL and 2.5 for SMCI, alongside style tags of 'value, high-quality' for GOOGL and 'income, mature' for SMCI, summarise these differing profiles as presented in the data.

• Value: SMCI
• Growth: GOOGL
• Income: SMCI
• Quality: GOOGL

Frequently asked questions

Which stock has the higher valuation based on the data?

The valuation verdict is scored a tie. GOOGL has a trailing P/E of 27.15 and forward P/E of 12.86 with a PEG of 0.59, while SMCI's P/E is 0 (not meaningful) with a P/S of 19.57, higher than GOOGL's 10.29 P/S. GOOGL's P/B of 9.09 is higher than SMCI's 2.94.

Which company has shown stronger growth?

GOOGL is rated A for growth, with a three-year revenue CAGR of 15.13% and three-year EPS CAGR of 34.19%. SMCI shows a three-year revenue CAGR of -4.3% and three-year EPS CAGR of -5.59%, per the supplied data.

Which company carries less debt relative to cash?

SMCI holds a net-debt-to-EBITDA ratio of -0.86, indicating net cash, with total debt of approximately $29.82 billion against cash of approximately $34.99 billion. GOOGL shows a net-debt-to-EBITDA ratio of 2.61, with total debt of approximately $34.01 billion against cash of approximately $22.62 billion.

How have the two stocks performed recently?

GOOGL's year-to-date return is 51.74% and one-year return is 28.87%. SMCI's year-to-date return is 23.16% and one-year return is -1.45%. Over five years, SMCI's annualised return of 32.67% exceeds GOOGL's 25.98%, per the supplied figures.

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