Alphabet (NASDAQ:) (NASDAQ:) crushed its expectations, with EPS coming in a whopping 40% ABOVE what the street was anticipating. The biggest earnings beat in at least the last 8 quarters. And probably a lot longer than that.

EPS grew 49% y/y, the best growth rate for the company since Q1 24. Over the last 8 quarters, earnings have grown at an average rate of 41%.

Sales also came in above street estimates by 1.4%, on 13% y/y growth. Right around the company average for the last 8 quarters.

Ad revenue grew 8% (vs 10-13% growth over the prior quarters)

Cloud revenue grew 28% (vs 30-35% rate in the last 2 quarters)

The stock is still about 20% off its record highs but is the 2nd best performer of the MAG 7 since the February 19th market highs, and the 4 best performer YTD.

The stock is up about 4% in after-hours as I type this.

Looking ahead, the street is currently expecting about 9.5% sales growth, but almost 0% EPS growth over the next 4 quarters. This could be revised higher tomorrow based on how the conference call goes.

That gives Google a forward PE of 18.5x, about a 20% discount to its 5-year average.

And a forward price to sales of 5.8x, which is about 6.7% discount to its 5-year average.

I still have my concerns on the company’s core business, as sales growth is flatlining while earnings growth is slowing rapidly. But some portion of that risk is already priced in. As Google has the cheapest PE of the MAG 7 at 18.5x, the company isn’t even getting the market multiple ( forward PE is 19.7x)