Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock got a small lift on Tuesday, rising 2% higher through 10:30 a.m. ET. The move came in response to President Trump, in one of his first acts in office in his second term, signing an executive order that revoked another executive order (by his predecessor Joe Biden).

Biden’s order required the U.S. government to set standards for the “safety” of AI models, and for developers of artificial intelligence (AI) systems to share with the U.S. government the results of safety tests of their AI models before releasing them to the public.

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What the new Trump executive order does

It’s not 100% clear how much the Biden order cost AI companies like Alphabet’s Google, which makes Gemini AI and uses it to provide quick answers to Google searches made in question form (among other uses). But it’s likely that the added regulation did impose at least some costs.

For this reason, repealing the order is likely to save Google (and Microsoft, Amazon, and OpenAI) at least some money, boosting the company’s profits incrementally. To this extent, a small boost in Alphabet’s stock price seems justified.

More broadly, Trump’s move may hint at a broader support by the new administration for expanding use of AI by industry, boosting Alphabet’s business in ways that are yet to be seen.

Is Alphabet stock a buy?

The question investors need to ask is whether reducing costs a bit for Google, and expanding opportunities in unknown (and unquantifiable) ways, makes Alphabet stock a “buy” at its current price.

And I’m not sure if it does.

Valued on earnings, Alphabet stock seems not unreasonably priced at a 25.5 P/E ratio and a 17% projected long-term earnings growth rate. Problem is, Alphabet is spending a lot of money on AI investment, which dramatically depresses free cash flow to barely 60% of reported net income. Alphabet costs a pricey 43 times free cash flow currently. To my value investing eye, that’s too much to pay for 17% growth.

Therefore, at this price, Alphabet stock is no buy.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.