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Investing.com -- Moody’s Ratings on Monday affirmed Alphabet Inc’s (NASDAQ:GOOGL) Aa2 long-term issuer and senior unsecured debt ratings and assigned the same rating to a new series of proposed senior unsecured notes. The outlook for the Google parent remains stable.

Proceeds from the new debt issuance will be used for general corporate purposes, which may include the repayment of outstanding obligations. Moody’s cited Alphabet’s dominant positions in search, YouTube, Android, and digital advertising as key strengths underpinning the rating.

As of March 31, 2025, the company held approximately $95 billion in cash and marketable securities. Alphabet also maintains a low debt load, with a debt-to-EBITDA ratio of just 0.23x, highlighting its conservative financial profile.

The agency noted Alphabet’s scale, profitability, and commitment to research and development as contributing factors to its financial resilience. Free cash flow is projected to reach $67 billion this year, with expected revenue growth of 10%.

Alphabet’s liquidity is further supported by a $10 billion commercial paper program and $10 billion of undrawn credit facilities. Moody’s said the company’s ability to generate consistent and substantial cash flow remains a core strength.

However, Moody’s also warned of risks to the business, including the cyclical nature of advertising, emerging competitive threats, and sustained regulatory pressure. Legal challenges to Google’s search dominance resulted in rulings labeling the company as an illegal monopolist in both the U.S. and Europe.

Remedies from those rulings, delivered in March 2025 and August 2024 respectively, are likely to be finalized in the second half of this year. Moody’s indicated that the outcomes could have material implications for Alphabet’s business model if enforcement measures are far-reaching.

Despite those risks, the rating agency expects Alphabet to maintain its market leadership while adhering to disciplined financial practices. The stable outlook reflects confidence that Alphabet can navigate regulatory headwinds without materially weakening its business.

Moody’s said an upgrade could occur if Alphabet sustains conservative financial policies and effectively manages regulatory and legal outcomes. Conversely, a downgrade could result from deterioration in its core search business, major legal or regulatory disruption, or a pivot to more aggressive financial strategies.

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