Alphabet Inc. (GOOGL)vs Intel Corp. (INTC)

Quick verdict

Alphabet (GOOGL) and Intel (INTC) represent contrasting profiles within technology. Alphabet trades on a forward P/E of 12.86 versus Intel's 40.53, backed by a 38.98% ROE and 32.7% operating margin, compared with Intel's -2.95% ROE and -9.45% operating margin. Alphabet's PEG of 0.61 indicates growth priced reasonably against its 34.19% three-year EPS CAGR. Intel's TTM P/E is negative (-166.11), reflecting recent losses, though its forward P/E of 40.53 implies anticipated recovery. Intel's 3.66% dividend yield and 35.65% payout ratio suit income-oriented profiles, against Alphabet's 0.23% yield. One-year returns favour Intel (103.11% versus 28.87%), but Alphabet leads over three and five years. Verdicts score Alphabet 2 overall with A grades for quality and balance sheet, versus Intel's overall score of 4 with B grades across valuation, growth, and income.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Alphabet generates revenue primarily through digital advertising, cloud computing, and consumer platforms across North and South America, Europe, the Middle East, Africa, and Asia-Pacific, per its stated description. Intel designs, manufactures, and sells computing products through three segments: CCG, DCAI, and Intel Foundry, operating chiefly in the US, Ireland, and Israel alongside international markets. Alphabet's model is asset-light in advertising but capital-intensive in cloud and AI infrastructure, reflected in a market capitalisation of approximately $4.49 trillion versus Intel's $517.6 billion. Intel's foundry ambitions position it within capital-intensive semiconductor manufacturing, a structurally different economic model from Alphabet's platform-driven revenue base. Both operate in innovation-heavy segments, but Alphabet's diversified digital platforms contrast with Intel's hardware-centric, manufacturing-dependent operations, which currently show negative operating margin (-9.45%) against Alphabet's 32.7%.

Valuation

On trailing earnings, Alphabet's P/E of 28.02 appears elevated in isolation but falls to 12.86 on a forward basis, while Intel's TTM P/E is negative (-166.11) due to recent losses, with its forward P/E at 40.53 reflecting expected earnings recovery from a low base. Alphabet's PEG ratio of 0.61 suggests its growth is attractively priced relative to earnings expansion, whereas Intel's PEG of -0.02 is not meaningful given negative underlying profitability. Price-to-sales stands at 10.62 for Alphabet versus 9.63 for Intel, broadly comparable. However, Alphabet's price-to-book of 9.37 exceeds Intel's 4.70, and EV/EBITDA of 20.74 versus Intel's 47.83 shows Alphabet trading cheaper relative to cash earnings despite its larger scale. The valuation verdict grades both B, though Alphabet's fundamentals-adjusted metrics generally appear more favourable.

Growth profile

Alphabet shows steadier top-line growth, with a three-year revenue CAGR of 15.13% and five-year figure of 11.26%, compared with Intel's -0.47% three-year and 14.27% five-year revenue CAGR, indicating recent stagnation after earlier expansion. Alphabet's three-year EPS CAGR of 34.19% reflects consistent profit growth, while Intel's 98.66% three-year EPS CAGR is likely distorted by a low or negative prior-year base rather than organic strength. Over five years, EPS CAGR stands at 17.07% for Alphabet against 9.28% for Intel. Both carry a growth verdict of B, but the underlying quality of Alphabet's growth appears more consistent given positive revenue trends, whereas Intel's recent revenue contraction raises questions about the durability of its reported EPS growth figures.

Profitability and quality

Alphabet's profitability metrics substantially outpace Intel's across every measure supplied. Gross margin stands at 60.37% for Alphabet versus 35.43% for Intel, while operating margin is 32.7% against Intel's -9.45%, and net margin 37.91% versus -5.90%. Return on equity is 38.98% for Alphabet compared with -2.95% for Intel, and return on invested capital is 19.21% versus -2.81%. These figures indicate Alphabet is currently generating substantial profit from its asset base and equity, while Intel's operations are reporting losses at the operating and net level. This disparity underpins the quality verdict of A for Alphabet against an implied lower standing for Intel, despite Intel's respectable current ratio and interest coverage discussed separately.

Balance-sheet risk

Alphabet holds $22.6 billion in cash against $34.0 billion total debt, with net debt/EBITDA of 2.61 and interest coverage of 41.2 times, alongside a current ratio of 1.92. Intel holds a larger cash position of $52.4 billion against $21.8 billion total debt, giving net debt/EBITDA of 2.98 and a current ratio of 2.31, with interest coverage of 14.63 times. While Intel's absolute cash buffer and current ratio appear stronger, its lower interest coverage and negative profitability metrics elsewhere suggest less capacity to service debt from operating earnings. Alphabet's substantially higher interest coverage indicates greater ease meeting interest obligations from operating income. Both receive a balance sheet verdict, with Alphabet graded A, reflecting the combination of leverage and coverage metrics.

Price performance and shareholder returns

Over the past year, Intel delivered a 103.11% return compared with Alphabet's 28.87%, and year-to-date Intel is down -25.90% against Alphabet's gain of 51.74%, highlighting volatility. Over three years annualised, Alphabet returned -3.59% versus Intel's 12.79%, while over five years Intel's annualised return of 27.80% modestly exceeds Alphabet's 25.98%. Intel's maximum five-year drawdown of -45.25% is considerably deeper than Alphabet's -21.89%, and its beta of 2.187 signals higher volatility than Alphabet's 1.247. The momentum verdict for both is B. These figures collectively suggest Intel has experienced sharper price swings and deeper drawdowns, while Alphabet's return profile has been comparatively steadier across the periods measured.

Which stock fits which investor

Based on the supplied verdicts, Alphabet is best suited to investors prioritising value and quality, reflected in its A grades for quality and balance sheet, forward P/E of 12.86, PEG of 0.61, and high ROE of 38.98%. Intel is flagged as best for value, growth, and income profiles in the data's bestFor mapping, supported by its 3.66% dividend yield and 103.11% one-year return, though this sits alongside negative net margin (-5.90%) and ROE (-2.95%). Alphabet's styleTag is described as value, high-quality, while Intel's is income, mature. The overall scores of 2 for Alphabet and 4 for Intel indicate differing composite standings across the assessed categories, with each suited to different portfolio objectives depending on emphasis placed on income versus profitability quality.

• Value: INTC
• Growth: INTC
• Income: INTC
• Quality: GOOGL

Frequently asked questions

Which stock has the higher dividend yield?

Intel offers a dividend yield of 3.66% with a payout ratio of 35.65%, compared with Alphabet's dividend yield of 0.23% and payout ratio of 6.34%. This makes Intel the higher-yielding option based on current data.

How do the valuations compare on a forward basis?

Alphabet trades on a forward P/E of 12.86 versus Intel's 40.53. Alphabet's PEG ratio of 0.61 also indicates growth priced more moderately relative to earnings expansion than Intel's, whose PEG of -0.02 is not meaningful given negative profitability.

Which company shows stronger profitability?

Alphabet reports a net margin of 37.91%, operating margin of 32.7%, and ROE of 38.98%, all substantially higher than Intel's net margin of -5.90%, operating margin of -9.45%, and ROE of -2.95%, based on the supplied figures.

Which stock has performed better recently?

Over one year, Intel returned 103.11% versus Alphabet's 28.87%, but year-to-date Intel is down -25.90% while Alphabet is up 51.74%. Over three years annualised, Intel's 12.79% exceeds Alphabet's -3.59%, though Alphabet's five-year annualised return of 25.98% is close to Intel's 27.80%.

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