Alphabet Just Bought Into Nuclear Power. That Is Why I Am Buying Alphabet.
Alphabet is signing contracts for nuclear reactors, suspending buybacks, and doubling its debt load, and one investor sees all of that spending as the most bullish signal in the entire position.
I keep hitting the buy button on Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction), and the news that the company is locking in nuclear power for its AI data centers is the kind of receipt that keeps me adding. When a business is signing up for reactors, it is telling you what it thinks the next decade of demand looks like (we mapped five ways to play the reactor restart, utilities and fuel included, in a free nuclear report). I want to own that conviction for the long haul.
What Keeps Pulling Me Back
My thesis is simple. Alphabet already owns the two most valuable pieces of digital real estate on the planet, Search and YouTube, and it is now building the compute layer that the rest of the AI economy will rent from it. Google Cloud revenue hit $24.77B in Q2 FY26, growing 82% year over year, after posting 34%, 48%, and 63% growth in the prior three quarters. That is acceleration on top of an already massive base. The Gemini App has 950 million monthly active users, Gemini models process 22 billion API tokens per minute, and nearly 90% of the Fortune 100 use Gemini Enterprise. Search & other still grew 17% year over year to $63.27B, which puts the tired “AI kills Google” thesis to bed.
Receipts That Back Up the Buy
Three sets of numbers do the work. First, quality: ROE 35.70%, ROIC 29.60%, operating margin 32.03%, gross margin 59.65%. Second, the balance sheet: debt/equity 0.143, net debt/EBITDA 0.19, interest coverage 175.3x. Third, valuation: at a P/E of 15 and earnings yield of 6.65%, I am paying a market multiple for a business compounding at hyperscaler pace.
Q2 EPS of $9.11 beat the $3.0427 estimate for the 11th straight EPS beat. Revenue of $119.80B grew 24.23% year over year, the 12th consecutive double-digit revenue quarter. Cloud backlog reached $460B+ at Q1 FY26. Waymo passed 500,000 fully autonomous rides per week. The quarterly payout was raised 5% to $0.22 per share. Small yield, but the direction and coverage matter more to me than the current 0.51%.
Why Alphabet Over the Obvious Alternative
The reflex hyperscaler pick is Microsoft (NASDAQ:MSFT). I own some. My incremental dollar keeps going to Alphabet because I am not paying a premium for the same story. GOOGL trades at a P/E of 15 while printing 82% Cloud growth and ROIC near 30%. Alphabet also owns Search and YouTube ad economics no rival can replicate (YouTube annual revenue across ads and subs exceeded $60B), designs its own TPUs rather than renting somebody else’s silicon, and is now moving upstream into the power stack itself. The nuclear PPA is the same pattern: control the input, own the outcome.
Risk I Am Not Ignoring
The capex bill is the real risk. Alphabet spent $44.92B on capex in Q2 alone, up 100.14% year over year, guided to $175B to $185B for 2026, generated negative free cash flow of -$5.86B, more than doubled long-term debt from $46.5B to $98.2B, and suspended the buyback in Q2 2026. Interest expense jumped nearly 5x. If AI demand disappoints, this looks like overbuild. My answer is in the same filing: $460B+ Cloud backlog, 82% Cloud growth, 950 million Gemini users, and interest coverage of 175x tell me the demand is real and the balance sheet can carry the bet.
Forward Conviction
Over ten years GOOGL is up 766.57%; the past year, 41.19%. I buy the stock because the company keeps earning those returns. Alphabet is building the power grid, the chips, the models, the distribution, and the ad engine that funds it all, and it is doing it with a fortress balance sheet at a market P/E. That is the rare compounder I plan to keep feeding for the next decade.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
