The distribution moat is still real, and AI can raise product utility across Search, YouTube, and Android while Cloud scales on AI workloads. The swing factors are infrastructure intensity and antitrust remedies that can cap valuation upside.

Alphabet compounds by converting distribution (Search/YouTube/Android/Chrome) into AI-native intent capture while scaling Cloud on differentiated infrastructure, with upside from safety/trust rails and autonomy; the limiter is sustained capex + remedies that constrain multiple expansion.

In a world where cognition is cheap, Google’s advantage is default distribution + measurement + full-stack AI/compute; it can internalize “answer engines” rather than be disintermediated, but policy and capex intensity cap the ceiling.

Alphabet’s non-linear opportunity is to turn its consumer surfaces into the “front door” for agentic workflows (research, shopping, travel, productivity) while keeping ads outcome-measurable and fraud-resistant. Cloud growth can remain above market if it uses its own AI infrastructure and tighter capacity planning to improve utilization and unit costs. Waymo and trust/identity-style products are credible call options, but the market likely values them conservatively until cash flows are visible. Net: strong compounding, but too large and too regulated for a sustained hype re-rate.

The main risks are structural: (1) AI changing Search’s economics faster than new formats monetize, (2) sustained infrastructure intensity (capex, depreciation, energy) compressing cash returns, and (3) antitrust remedies that weaken default distribution and ad-tech leverage. None are existential, but any two together can cap shareholder compounding.

$314.64