Alphabet (GOOGL 0.93%) (GOOG 0.92%) got 2021 started right. For a first quarter when it was just beginning to lap the depressed financial results of 2020, the Google parent posted revenue growth of 34% and net income gains of 162%. Though it's already one of the largest companies in the world, the tech giant is showing no signs of slowing down.

Also worth noting: It has at its disposal net cash, equivalents, and short-term investments of over $121 billion on the balance sheet. Free cash flow is also on the rise (to more than $13.3 billion during the first three months of the year), which continuously adds to the company's war chest. That might seem like an unspendable figure, but Alphabet is finding lots of uses for its cash.  

Alphabet helps brands build direct relationships with consumers

The digital advertising world is changing. Apple recently rolled out an operating system update that requires users to actively opt in to allow app and online activity tracking. Given the explicit choice, most of its device users are likely to opt out.

Someone pressing an internet search bar.

Image source: Getty Images.

Alphabet is making similar moves on the privacy front -- but not identical ones. Instead, Alphabet has said it will develop new products based on aggregated data that keeps users anonymous, as well as products to help its partners create direct relationships with consumers. 

Work on this front is already underway and a great success. Revenue from Google Search and other ads grew 32% to $44.7 billion. But there's more work to be done as other digital marketing firms are developing their own products to both increase users' internet privacy and help boost the effectiveness of ads. Fostering the use of new features will cost a lot of money, but Alphabet can afford it. Ongoing revisions to Search (Google is constantly tweaking its AI algorithms) are helping consumers find better results for terms like "curbside pickup," and Alphabet also recently unlocked the ability for hotels to list their booking links for free on Search.  

Alphabet has been pouring cash into other products to promote consumer uptake that include features for brand marketers to create relationships with their customers. The Google Pay digital wallet is one example. The company has been giving out lots of cash rewards in recent months to users who refer friends, shop with brand partners within the app, or activate bank spending analytics. Alphabet has thus far kept mum regarding its specific aspirations in the digital payments space, but all of these moves support the company's goal of updating its privacy practices -- which will be money well spent down the road.

The cloud is the future for Alphabet

Google Cloud also remains a fast-growing segment, but one that has yet to turn a profit. Cloud revenue rose by 46% in Q1 to $4.05 billion, but the segment's operating loss tallied up to $974 million -- although that was a huge improvement from its $1.73 billion operating loss in the prior-year quarter. The same goes for the "Other Bets" segment, which contains start-ups like autonomous vehicle company Waymo and anti-aging researcher Calico. Other Bets' revenue was $198 million, but it racked up operating losses of $1.15 billion.  

Cloud and these other businesses are long-term investments for Alphabet, though, as it looks to diversify its profit sources away from its massive search and advertising businesses. Google Cloud and especially Other Bets will continue to generate operating losses for some time. But the company can afford that thanks to its highly profitable core Search product and its enviable balance sheet.

Additionally, underpinning the entire Alphabet ecosystem of businesses are its data centers. CEO Sundar Pichai said some $7 billion will be laid out in the U.S. alone this year to upgrade data centers -- spending which he said would create at least 10,000 new full-time jobs.

And speaking to data centers specifically, the company is matching its operations with renewable energy generation projects and says it's on track to have a carbon-neutral energy footprint by 2030. These kinds of projects carry up-front costs, but over the long term, they will help Alphabet save money on the substantial electricity requirements of running its cloud services.  

A new $50 billion share repurchase plan

All of the aforementioned projects can be funded by Alphabet's free cash flow generation. But what of the balance sheet's excess cash? There's a plan for some of that too. Alphabet just approved an additional $50 billion in share repurchases. That's a big chunk of cash earmarked to be returned to shareholders. 

Alphabet has one of the largest net cash positions of any business, but it's finding plenty of places to put some of those funds to work. With its market cap now around 32 times trailing 12-month free cash flow, this stock remains a great long-term value among the tech giants.