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For second-quarter 2025, the Zacks Consensus Estimate for earnings is pegged at $2.13 per share, up by a penny over the past 30 days and indicates 12.7% year-over-year growth.
The consensus mark for second-quarter revenues is pegged at $79.22 billion, indicating growth of 11.02% from the year-ago quarter’s reported figure.
Alphabet has an impressive earnings surprise history. GOOGL’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 14.64%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Let’s see how things have shaped up for the upcoming announcement:
Growing AI Usage in Search to Aid GOOGL’s Q2 Results
Alphabet’s to-be-reported quarterly results are expected to benefit from solid momentum in Search and Cloud businesses.
The integration of Generative AI (Gen AI) technology into the search engine has been benefiting Google Search. AI-powered Circle to Search is now available on more than 300 million Android devices, with people using it to shop, translate text, and learn more about the world around them. Circle to Search is driving additional Search and is gaining popularity among younger users. The addition of AI mode expands AI Overview’s advanced reasoning, thinking and multimodal capabilities.
The Zacks Consensus Estimate for second-quarter 2025 Search and other revenues is pegged at $52.36 billion, indicating 8% growth over the figure reported in the year-ago quarter.
GOOGL Cloud Gaining Market Share
Alphabet has been rapidly growing in the booming cloud computing market. Google Cloud has solidified its position as the third-largest provider in the highly competitive cloud infrastructure market against Amazon’s (AMZN - Free Report) cloud arm, Amazon Web Services (AWS), and Microsoft’s (MSFT - Free Report) Azure. The solid adoption of the Google Cloud Platform and Google Workspace is expected to have driven growth in the Google Cloud segment.
According to Synergy Research Group data, Google Cloud, along with Microsoft, is gaining market share, while AWS continues to lead with a 29% market share in the first quarter of 2025. Alphabet and Microsoft had 22% and 12% market share, respectively.
The consensus mark for second-quarter 2025 Google Cloud revenues is pegged at $13.04 billion, indicating 26% growth over the figure reported in the year-ago quarter.
However, GOOGL is suffering from a lack of capacity, and until new capacity comes online in 2025, cloud revenues are expected to see increased variability. This is expected to have hurt Alphabet’s Google Cloud revenues in the to-be-reported quarter.
GOOGL Shares Lag Sector, Industry
Image Source: Zacks Investment Research
Alphabet’s shares have declined 3.1% year to date, underperforming the Zacks Internet Services industry and the Zacks Computer & Technology sector. Over the same timeframe, the sector has returned 9.5% while the industry has dropped 0.9%.
GOOGL Stock’s Performance
GOOGL shares are overvalued, as suggested by Value Score C.
Currently, GOOGL is trading at a premium, with a forward 12-month Price/Sales of 6.43X compared with the industry’s 5.49X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
Technically, GOOGL shares are displaying a bullish trend as they trade above the 50-day and 200-day moving averages.
GOOGL Trades Above 50-day & 200-day SMAs
Image Source: Zacks Investment Research
Cloud Growth to Drive GOOGL Prospects
Alphabet is benefiting from an expanding clientele and rich partner base. Google Cloud is benefiting from its partnership with NVIDIA (NVDA - Free Report) . Google Cloud was the first cloud provider to offer NVIDIA’s B200 and GB200 Blackwell GPUs and will be offering its next-generation Vera Rubin GPUs. Google Cloud is becoming a preferred choice for enterprises planning to deploy AI agents thanks to the Agent Development Kit and a low-code tool offering Agent Designer. The addition of Wiz to Google Cloud will boost competitive prowess against the likes of Amazon and Microsoft in the cloud computing space.
Google Cloud’s expanding clientele is expected to boost Alphabet’s top line. Google Cloud is now expanding its footprint based on the latest deals with Ecobank in Africa and BBVA. BBVA’s deal with Google Cloud will enable Alphabet to deploy Google Workspace with Gemini across the global operations of the bank. Meanwhile, the Ecobank collaboration aims at transforming financial services with advanced analytics and AI and driving digital empowerment across Africa. This offers a significant growth opportunity for Google Cloud in one of the most underpenetrated regions of the globe.
GOOGL Stock: Buy, Sell or Hold Ahead of Q2?
Alphabet’s growing Gen AI capabilities present a potential catalyst for future growth. Its dominant position in the Search market is a strong growth driver. However, a stretched valuation, stiff competition in the cloud space and growing regulatory headwinds make GOOGL shares risky for investors ahead of second-quarter 2025 results.
Image: Bigstock
Buy, Sell or Hold Alphabet Stock? Key Tips Ahead of Q2 Earnings
Key Takeaways
Alphabet (GOOGL - Free Report) is set to report second-quarter 2025 results on July 23.
For second-quarter 2025, the Zacks Consensus Estimate for earnings is pegged at $2.13 per share, up by a penny over the past 30 days and indicates 12.7% year-over-year growth.
The consensus mark for second-quarter revenues is pegged at $79.22 billion, indicating growth of 11.02% from the year-ago quarter’s reported figure.
Alphabet has an impressive earnings surprise history. GOOGL’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 14.64%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Let’s see how things have shaped up for the upcoming announcement:
Growing AI Usage in Search to Aid GOOGL’s Q2 Results
Alphabet’s to-be-reported quarterly results are expected to benefit from solid momentum in Search and Cloud businesses.
The integration of Generative AI (Gen AI) technology into the search engine has been benefiting Google Search. AI-powered Circle to Search is now available on more than 300 million Android devices, with people using it to shop, translate text, and learn more about the world around them. Circle to Search is driving additional Search and is gaining popularity among younger users. The addition of AI mode expands AI Overview’s advanced reasoning, thinking and multimodal capabilities.
The Zacks Consensus Estimate for second-quarter 2025 Search and other revenues is pegged at $52.36 billion, indicating 8% growth over the figure reported in the year-ago quarter.
GOOGL Cloud Gaining Market Share
Alphabet has been rapidly growing in the booming cloud computing market. Google Cloud has solidified its position as the third-largest provider in the highly competitive cloud infrastructure market against Amazon’s (AMZN - Free Report) cloud arm, Amazon Web Services (AWS), and Microsoft’s (MSFT - Free Report) Azure. The solid adoption of the Google Cloud Platform and Google Workspace is expected to have driven growth in the Google Cloud segment.
According to Synergy Research Group data, Google Cloud, along with Microsoft, is gaining market share, while AWS continues to lead with a 29% market share in the first quarter of 2025. Alphabet and Microsoft had 22% and 12% market share, respectively.
The consensus mark for second-quarter 2025 Google Cloud revenues is pegged at $13.04 billion, indicating 26% growth over the figure reported in the year-ago quarter.
However, GOOGL is suffering from a lack of capacity, and until new capacity comes online in 2025, cloud revenues are expected to see increased variability. This is expected to have hurt Alphabet’s Google Cloud revenues in the to-be-reported quarter.
GOOGL Shares Lag Sector, Industry
Image Source: Zacks Investment Research
Alphabet’s shares have declined 3.1% year to date, underperforming the Zacks Internet Services industry and the Zacks Computer & Technology sector. Over the same timeframe, the sector has returned 9.5% while the industry has dropped 0.9%.
GOOGL Stock’s Performance
GOOGL shares are overvalued, as suggested by Value Score C.
Currently, GOOGL is trading at a premium, with a forward 12-month Price/Sales of 6.43X compared with the industry’s 5.49X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
Technically, GOOGL shares are displaying a bullish trend as they trade above the 50-day and 200-day moving averages.
GOOGL Trades Above 50-day & 200-day SMAs
Image Source: Zacks Investment Research
Cloud Growth to Drive GOOGL Prospects
Alphabet is benefiting from an expanding clientele and rich partner base. Google Cloud is benefiting from its partnership with NVIDIA (NVDA - Free Report) . Google Cloud was the first cloud provider to offer NVIDIA’s B200 and GB200 Blackwell GPUs and will be offering its next-generation Vera Rubin GPUs. Google Cloud is becoming a preferred choice for enterprises planning to deploy AI agents thanks to the Agent Development Kit and a low-code tool offering Agent Designer. The addition of Wiz to Google Cloud will boost competitive prowess against the likes of Amazon and Microsoft in the cloud computing space.
Google Cloud’s expanding clientele is expected to boost Alphabet’s top line. Google Cloud is now expanding its footprint based on the latest deals with Ecobank in Africa and BBVA. BBVA’s deal with Google Cloud will enable Alphabet to deploy Google Workspace with Gemini across the global operations of the bank. Meanwhile, the Ecobank collaboration aims at transforming financial services with advanced analytics and AI and driving digital empowerment across Africa. This offers a significant growth opportunity for Google Cloud in one of the most underpenetrated regions of the globe.
GOOGL Stock: Buy, Sell or Hold Ahead of Q2?
Alphabet’s growing Gen AI capabilities present a potential catalyst for future growth. Its dominant position in the Search market is a strong growth driver. However, a stretched valuation, stiff competition in the cloud space and growing regulatory headwinds make GOOGL shares risky for investors ahead of second-quarter 2025 results.
Alphabet currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.