Alphabet's cloud business is growing far faster than its valuation suggests, making it a compelling pick among the 'Magnificent Seven' tech stocks.

What happened: Google Cloud revenue jumped 63% year over year in the first quarter of 2026 to $20 billion（約3.2兆円）, and the segment's operating income roughly tripled to $6.6 billion（約1.1兆円）. CEO Sundar Pichai said the cloud business would have grown even faster if the company could meet all demand, with a backlog of contracted but unrecognized revenue nearly doubling to $462 billion（約74兆円）.

Why it matters: Alphabet trades at about 28 times earnings and roughly 26 times forward earnings — a market-average multiple for a company whose cloud arm is growing at 63% and whose core search business is still growing at a high-teens clip. This gap between growth speed and stock valuation suggests the market may not yet be pricing in the cloud business's contribution fairly.

What to watch: Alphabet plans capital expenditures of $180 billion（約29兆円） to $190 billion（約30兆円） in 2026, and management has said 2027 spending will rise meaningfully from there. This heavy investment only pays off if cloud demand holds steady; a stumble in spending discipline or slowing demand could change the picture.