Introducing Valuation Models! 
Key Stats for GOOGL Stock
- Price Change for Alphabet stock: 2%
- Current Share Price: $194
- 52-Week High: $207
- GOOGL Stock Price Target: $206
What Happened?
Alphabet (GOOGL) stock is up 2% after the tech giant delivered a strong second-quarter beat across key metrics, while announcing a $10 billion increase in capital expenditures for 2025 to meet surging AI demand.
Alphabet reported earnings of $2.31 per share, easily beating the $2.18 estimate, while revenue of $96.43 billion topped estimates of $94 billion, indicating a year-over-year growth of 14%.
The standout performance was driven by strength across Alphabet’s core businesses:
- Google Cloud delivered impressive results with $13.62 billion in revenue, beating estimates of $13.11 billion and growing 32% year-over-year.
- YouTube advertising revenue of $9.8 billion also exceeded the $9.56 billion expectation.
- Search revenues of $54.19 billion grew 12% year-over-year despite intensifying AI competition.
However, the key development was Alphabet’s announcement that it would increase 2025 capital expenditures to $85 billion, up from the previous estimate of $75 billion.
CFO Anat Ashkenazi stated that the increase reflects “strong and growing demand for our Cloud products and services,” with expectations for further capital expenditures (CapEx) increases in 2026.
The company’s AI infrastructure investments are proving critical as nearly all GenAI unicorns use Google Cloud.
CEO Sundar Pichai highlighted remarkable AI adoption metrics, revealing that Alphabet now processes over 980 trillion monthly tokens across its surfaces, doubling from 480 trillion announced at I/O in May.
The Gemini app has grown to over 450 million monthly active users, while AI Overviews now serves over 2 billion monthly users across 200+ countries.
See analysts’ growth forecasts and price targets for GOOGL (It’s free!) >>>
What the Market Is Telling Us About GOOGL Stock
The positive market reaction reflects investor confidence in Alphabet’s AI strategy and ability to monetize its massive investments.
While the $10 billion CapEx increase is substantial, it signals strong underlying demand for Google’s AI infrastructure and cloud services.
Its ability to grow Cloud revenue by 32% year-over-year, while expanding operating margins from 11.3% to 20.7%, demonstrates operational leverage.
The Google Cloud business appears to be reaching an inflection point, with an annual run rate of over $50 billion and accelerating growth in both new customers and deal sizes.
Management noted that billion-dollar deals signed in the first half of 2025 already match the total for the entire 2024, while deals exceeding $250 million have doubled year-over-year.
Importantly, Alphabet is successfully defending its Search moat while expanding into new AI-powered experiences.
Search revenue grew 12% despite AI competition, with AI Overviews driving over 10% more queries for the types of queries that show them.
Google’s ability to maintain Search growth while investing heavily in next-generation AI experiences suggests a successful transition strategy.
The partnership with OpenAI for cloud infrastructure, where Google will provide cloud services for ChatGPT, validates its competitive position in AI infrastructure. This represents a significant win against competitors like Microsoft Azure and Amazon Web Services.
Wall Street Analysts Are Bullish on These 5 Undervalued Compounders With Market-Beating Potential
TIKR just released a new free report on 5 compounders that appear undervalued, have beaten the market in the past, and could continue to outperform on a 1-5 year timeline based on analysts’ estimates.
Inside, you’ll get a breakdown of 5 high-quality businesses with:
- Strong revenue growth and durable competitive advantages
- Attractive valuations based on forward earnings and expected earnings growth
- Long-term upside potential backed by analyst forecasts and TIKR’s valuation models
These are the kinds of stocks that can deliver massive long-term returns, especially if you catch them while they’re still trading at a discount.
Whether you’re a long-term investor or just looking for great businesses trading below fair value, this report will help you zero in on high-upside opportunities.
Click here to sign up for TIKR and get our full report on 5 undervalued compounders completely free.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
