Hotcoin Research ｜ Alphabet (GOOGL) Tokenized Stock Project Report

I. Project Overview

Alphabet Inc. is one of the largest internet and artificial intelligence companies in the world, founded on September 4, 1998, and listed on NASDAQ. On-chain, GOOGL has entered the cryptocurrency market in a tokenized form, currently issued by Ondo Global Markets. At present, the on-chain price has a discount of about 1.5% compared to the spot price, which mainly arises from the pricing lag during U.S. stock market off-hours and differences in on-chain liquidity depth.

II. Project Introduction

Alphabet is the parent company of Google. Eighty percent of its revenue comes from Google Services, the majority of which is advertising; it also includes subscription services like YouTube TV, YouTube Music, Google One, revenue sharing from the Play Store platform, and hardware such as Pixel and Chromebook. Google Cloud accounts for about twenty percent of total revenue, with the remainder coming from cutting-edge businesses like Waymo (autonomous driving), Verily (healthcare), and Google Fiber.

In the fiscal year 2025, Alphabet's annual revenue surpassed $400 billion for the first time, with fourth-quarter revenue of $113.8 billion, an 18% year-over-year increase, and Google Cloud's growth rate reaching 48%. Entering 2026, growth further accelerated: first-quarter revenue for 2026 was $109.9 billion, a 22% year-over-year increase, marking the fastest quarterly growth since 2022; operating profit margin expanded from 33.9% to 36.1%.

On the on-chain level, the tokenized version of GOOGL (GOOGLon) is issued by Ondo Global Markets, which launched in September 2025 and has become the world's largest tokenized stock/ETF platform.

III. Products and Technology

Alphabet's technological moat is built on "full-stack AI"—self-developed chips, self-developed models, proprietary products, and owned distribution channels.

Search and Advertising: The market's biggest concern previously was that AI Q&A would erode search advertising. First-quarter data provided the opposite answer: search and other revenues grew by 19.1% year-over-year to $60.4 billion, paid clicks increased by 13%, and the cost per click rose by 5%, with both volume and price rising. Management stated that over the past five years, while continuously adding AI features, search delays have actually decreased by more than 35%; after upgrading AI Overviews and AI Mode to Gemini 3, core AI response costs have dropped by over 30%.

Cloud and Enterprise AI: First-quarter cloud business revenue grew by 63% year-over-year, surpassing $20 billion for the first time, with backlog orders nearly doubling to over $460 billion; enterprise AI solutions have become the primary growth engine for cloud business. The operating profit margin for cloud business expanded to 32.9%.

Models and Chips: Gemini 3 was released in November 2025, with monthly active users of Gemini applications exceeding 750 million. The self-developed TPU (seventh-generation Ironwood) has gained external clients, including Meta, making Alphabet a credible alternative to NVIDIA GPUs.

Other Businesses: Waymo's fully autonomous driving orders have surpassed 500,000 per week; Gemini Enterprise's paid monthly active users have increased by 40% quarter-over-quarter.

IV. Economic Model

As a mature stock asset, GOOGL's value capture comes from three levels.

Revenue Structure: Advertising remains the cornerstone of cash flow (first-quarter advertising revenue was $77.25 billion, including $9.9 billion from YouTube ads, an 11% increase), while cloud business provides a secondary growth curve, and "other bets" provide option value.

Capital Expenditure and Free Cash Flow: This is currently the most critical valuation variable. First-quarter capital expenditure was $35.7 billion, a staggering 107% year-over-year increase, leading to a 47% year-over-year decline in free cash flow to $10.1 billion; the company has raised its full-year 2026 capital expenditure guidance to $180 billion - $190 billion. The free cash flow profit margin has compressed from 21% to 9.2%, indicating that depreciation pressure over the next few quarters will continue to erode book returns.

Equity Structure and Shareholder Returns: Alphabet employs a three-tier equity structure: GOOGL (Class A, 1 vote), Class B (10 votes, held by founders), and GOOG (Class C, no voting rights), allowing founders to maintain long-term control. The company returns cash through quarterly dividends and large-scale buybacks.

Tokenization Mechanism: Ondo's tokenized stocks are total return tracking tools, held 1:1 by U.S.-licensed brokers corresponding to the underlying stocks; dividends are automatically reinvested after withholding tax, reflected as an increase in the number of tokens held rather than price adjustments. From June 26, 2026, GOOGLon and similar varieties will support 24/7 minting and redemption.

V. Team and Investors

Founders Larry Page and Sergey Brin have exited daily management but retain actual control through Class B shares. The current CEO is Sundar Pichai, CFO is Anat Ashkenazi, and Ruth Porat serves as President and Chief Investment Officer. Google DeepMind, led by Demis Hassabis, is the central hub for model development.

As a trillion-dollar company, Alphabet's "investors" include global institutions and retail shareholders, with passive asset managers like Vanguard, BlackRock, and State Street consistently ranking among the top holders.

VI. Roadmap

Alphabet can summarize three main lines:

First, computing power delivery. Management has made it clear that cloud business is constrained by capacity, with server deployment speed determining subsequent growth rather than demand; Q2 and Q3 cloud revenue growth may fall from 63% due to capacity rather than demand. The pace of capital expenditure of $180 billion - $190 billion is the most important observation point for 2026.

Second, deepening AI commercialization. Iteration of AI Mode on the search side, expansion of Gemini Enterprise's seats, and external sales of TPU are three channels to convert capital expenditure into revenue.

Third, new business turning positive. Waymo is transitioning from scale expansion to improving unit economics, and the market is generally focused on whether it can approach breakeven around 2027.

On the on-chain side, Ondo is pushing tokenized stocks into derivative and collateral scenarios. Ondo Perps began public testing in June 2026, offering tokenized stock perpetual contracts with up to 20 times leverage to non-U.S. qualified users and allowing tokenized securities to serve as collateral.

VII. Risks and Opportunities

Regulatory and legal risks are the most prominent. In September 2025, Judge Mehta's relief ruling, while not mandating the divestiture of Chrome, prohibited Google from signing exclusive distribution agreements for search, Chrome, and Gemini applications, and required sharing search indexes and user interaction data with qualified competitors; Google filed an appeal on January 16, 2026, and the Department of Justice filed a cross-appeal on February 3, seeking stronger structural divestiture. In the advertising technology antitrust case, the Department of Justice is pushing for the forced divestiture of AdX, with a relief ruling expected to be made in 2026; the European Union has already imposed a €2.95 billion fine in a similar case.

Financial risks are concentrated on the return cycle of capital expenditure. Depreciation is front-loaded, and revenue is back-loaded; if AI demand falls short of expectations, profit margins will be pressured. Competitive risks arise from model vendors like OpenAI and Anthropic diverting search entry points, as well as long-term ecological issues caused by AI answers compressing clicks.

Unique risks at the tokenization level cannot be ignored: issuer credit and custody risks, slippage and premium/discount due to insufficient on-chain liquidity (currently about 1.5% discount), pricing vacuums during U.S. stock market off-hours, smart contract and cross-chain bridge risks, and regional compliance restrictions.

Opportunities are equally clear: the backlog of cloud business orders has reached $460 billion, providing visibility for revenue over the next few years; external sales of TPU open up a second growth curve; the overall scale of tokenized stocks has surpassed $1.5 billion, and if this sector continues to expand, GOOGLon, as a blue-chip asset, still has significant room for improvement in on-chain liquidity and use cases (collateral, portfolio construction, 24/7 trading).

VIII. Conclusion

Alphabet is in a rare state: core business accelerating, cloud business exploding, AI full-stack capabilities being realized, while also bearing the heaviest capital expenditure and the most complex antitrust litigation in history. The market reaction to the first-quarter earnings report—performance exceeding expectations while stock prices weakened—precisely illustrates the current pricing contradiction: the market recognizes growth but is still re-evaluating "how much cash is paid for growth."

For on-chain investors, GOOGLon provides a new channel for gaining exposure to U.S. blue-chip stocks rather than a new asset class. Its risk-return characteristics essentially remain the stock risk of Alphabet, layered with tokenization infrastructure risk and liquidity discount. This report is for research reference only, all data comes from public sources and may change over time. Any investment decision should be based on independent judgment and professional advice.

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