We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alphabet Rises 11% in a Month: Buy, Sell or Hold the GOOGL Stock?
Read MoreHide Full Article
Key Takeaways
Alphabet's Q2 Search revenues rose 11.7% year over year to $54.19B, beating consensus estimates.
Google Cloud revenues surged 31.7% to $13.62B, driven by AI solutions and expanding partnerships.
AI Overviews reach 2B users monthly, boosting engagement and driving longer, more complex queries.
Alphabet (GOOGL - Free Report) shares have appreciated 11.3% in the past month, outperforming the broader Zacks Computer & Technology sector’s appreciation of 3.8%. The outperformance can be attributed to Alphabet’s strong second-quarter 2025 results that revealed the benefits of AI infusion across its Search business and a surge in Google Cloud revenues.
In the second quarter of 2025, Google Search and other revenues increased 11.7% year over year to $54.19 billion, surpassing the Zacks Consensus Estimate by 3.04% and accounting for 56.2% of total revenues. Overall queries and commercial queries on Search continued to grow year over year in the reported quarter.
Google continues to dominate the Search business, handling over 5 trillion queries annually, per Semrush. The company has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. Google accounts for 89.66% market share, followed by Microsoft’s (MSFT - Free Report) Bing, with 3.88% share.
Google Cloud revenues surged 31.7% year over year to $13.62 billion and accounted for 14.1% of the quarter’s total revenues. The figure beat the Zacks Consensus Estimate by 4.24%. The year-over-year growth was driven by growth in Google Cloud Platform (GCP) across core GCP products, AI Infrastructure, and Generative AI Solutions. Google Cloud’s annual revenue run rate is now more than $50 billion.
The strong growth in Search and Google Cloud has helped Alphabet shares outperform its closest peers in the cloud computing domain, Microsoft and Amazon. According to Synergy Research Group data, Amazon’s (AMZN - Free Report) cloud arm, Amazon Web Services, continues to lead with a 30% market share in the second quarter of 2025, while Alphabet and Microsoft had 20% and 13% market share, respectively.
GOOGL Stock’s Performance
Image Source: Zacks Investment Research
AI Push to Boost GOOGL’s Prospects
Alphabet is advancing visual and contextual search capabilities. The Circle to Search feature is now active on more than 300 million devices. The company is adding functionalities to help people explore complex topics and ask follow-up questions without switching apps. For instance, gamers can now use Circle to Search while playing mobile games to see an AI Overview or answers.
AI Overviews now reach more than 2 billion users per month and are available in over 200 countries across 40 languages. It is now driving over 10% more queries globally. Powered by Gemini 2.5, AI Overviews currently delivers the fastest AI responses in the industry. The combination of lens or Circle to Search, together with AI Overviews, is driving multimodal search usage.
Google’s AI-powered Search features are driving deeper engagement, with AI Mode offering advanced reasoning and multimodal responses. Users are generating queries twice as long as those in traditional searches. The launch of AI Mode in the United States and India — where it currently has more than 100 million monthly active users — is expected to drive further growth.
Google Cloud is benefiting from its partnership with the likes of NVIDIA and PayPal (PYPL - 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. PayPal will expand its Google Cloud adoption for AI-driven recommendations, transaction processing and enhanced security. The partnership expands the availability and functionality of PayPal’s payment services and capabilities across a range of Google products.
Google Cloud’s expanding clientele is expected to boost Alphabet’s top line. In the second quarter of 2025, the number of deals was over $250 million, doubling year over year, and the number of new GCP customers increased by nearly 28% sequentially.
Earnings Estimate Revisions Show Upward Trend for GOOGL
The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $2.32 per share, up 6.4% over the past 30 days, indicating 9.43% year-over-year growth.
The consensus mark for 2025 earnings is pegged at $9.94 per share, up 4% over the past 30 days, suggesting 23.6% over 2024’s reported figure.
Here’s Why Investors Should Hold GOOGL Stock Now
Alphabet’s growing AI capabilities and significant investments in cloud computing bode well for long-term investors. So, investors who have already invested in GOOGL stock should continue to hold it.
However, the Value Score of C suggests a stretched valuation for Alphabet at this moment.
Alphabet stock is trading at a premium, with a forward 12-month Price/Sales of 6.64X compared with the Zacks Internet Services industry’s 5.38X and Amazon’s 3.18X. However, GOOGL stock is cheaper than Microsoft’s 12X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
Regulatory headwinds like the lawsuit between the Department of Justice (DOJ) and GOOGL over Google Search are a concern. The DOJ argues that Google has inked anticompetitive deals with Apple and other companies for prime placement of its search engine and plans to break up Google to separate products like Chrome, Search and Android. DOJ’s proposal doesn’t bode well for Alphabet, given growing competition from AI-powered products like ChatGPT, Grok, DeepSeek, Perplexity and Meta AI.
GOOGL is suffering from a lack of capacity, and until new capacity comes online this year, cloud revenues are expected to witness increased variability. The company expects to invest roughly $85 billion in capital expenditures in 2025, which is aimed at building up technical infrastructure, primarily for servers, followed by data centers and networking.
Image: Bigstock
Alphabet Rises 11% in a Month: Buy, Sell or Hold the GOOGL Stock?
Key Takeaways
Alphabet (GOOGL - Free Report) shares have appreciated 11.3% in the past month, outperforming the broader Zacks Computer & Technology sector’s appreciation of 3.8%. The outperformance can be attributed to Alphabet’s strong second-quarter 2025 results that revealed the benefits of AI infusion across its Search business and a surge in Google Cloud revenues.
In the second quarter of 2025, Google Search and other revenues increased 11.7% year over year to $54.19 billion, surpassing the Zacks Consensus Estimate by 3.04% and accounting for 56.2% of total revenues. Overall queries and commercial queries on Search continued to grow year over year in the reported quarter.
Google continues to dominate the Search business, handling over 5 trillion queries annually, per Semrush. The company has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. Google accounts for 89.66% market share, followed by Microsoft’s (MSFT - Free Report) Bing, with 3.88% share.
Google Cloud revenues surged 31.7% year over year to $13.62 billion and accounted for 14.1% of the quarter’s total revenues. The figure beat the Zacks Consensus Estimate by 4.24%. The year-over-year growth was driven by growth in Google Cloud Platform (GCP) across core GCP products, AI Infrastructure, and Generative AI Solutions. Google Cloud’s annual revenue run rate is now more than $50 billion.
The strong growth in Search and Google Cloud has helped Alphabet shares outperform its closest peers in the cloud computing domain, Microsoft and Amazon. According to Synergy Research Group data, Amazon’s (AMZN - Free Report) cloud arm, Amazon Web Services, continues to lead with a 30% market share in the second quarter of 2025, while Alphabet and Microsoft had 20% and 13% market share, respectively.
GOOGL Stock’s Performance
Image Source: Zacks Investment Research
AI Push to Boost GOOGL’s Prospects
Alphabet is advancing visual and contextual search capabilities. The Circle to Search feature is now active on more than 300 million devices. The company is adding functionalities to help people explore complex topics and ask follow-up questions without switching apps. For instance, gamers can now use Circle to Search while playing mobile games to see an AI Overview or answers.
AI Overviews now reach more than 2 billion users per month and are available in over 200 countries across 40 languages. It is now driving over 10% more queries globally. Powered by Gemini 2.5, AI Overviews currently delivers the fastest AI responses in the industry. The combination of lens or Circle to Search, together with AI Overviews, is driving multimodal search usage.
Google’s AI-powered Search features are driving deeper engagement, with AI Mode offering advanced reasoning and multimodal responses. Users are generating queries twice as long as those in traditional searches. The launch of AI Mode in the United States and India — where it currently has more than 100 million monthly active users — is expected to drive further growth.
Google Cloud is benefiting from its partnership with the likes of NVIDIA and PayPal (PYPL - 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. PayPal will expand its Google Cloud adoption for AI-driven recommendations, transaction processing and enhanced security. The partnership expands the availability and functionality of PayPal’s payment services and capabilities across a range of Google products.
Google Cloud’s expanding clientele is expected to boost Alphabet’s top line. In the second quarter of 2025, the number of deals was over $250 million, doubling year over year, and the number of new GCP customers increased by nearly 28% sequentially.
Earnings Estimate Revisions Show Upward Trend for GOOGL
The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $2.32 per share, up 6.4% over the past 30 days, indicating 9.43% year-over-year growth.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
The consensus mark for 2025 earnings is pegged at $9.94 per share, up 4% over the past 30 days, suggesting 23.6% over 2024’s reported figure.
Here’s Why Investors Should Hold GOOGL Stock Now
Alphabet’s growing AI capabilities and significant investments in cloud computing bode well for long-term investors. So, investors who have already invested in GOOGL stock should continue to hold it.
However, the Value Score of C suggests a stretched valuation for Alphabet at this moment.
Alphabet stock is trading at a premium, with a forward 12-month Price/Sales of 6.64X compared with the Zacks Internet Services industry’s 5.38X and Amazon’s 3.18X. However, GOOGL stock is cheaper than Microsoft’s 12X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
Regulatory headwinds like the lawsuit between the Department of Justice (DOJ) and GOOGL over Google Search are a concern. The DOJ argues that Google has inked anticompetitive deals with Apple and other companies for prime placement of its search engine and plans to break up Google to separate products like Chrome, Search and Android. DOJ’s proposal doesn’t bode well for Alphabet, given growing competition from AI-powered products like ChatGPT, Grok, DeepSeek, Perplexity and Meta AI.
GOOGL is suffering from a lack of capacity, and until new capacity comes online this year, cloud revenues are expected to witness increased variability. The company expects to invest roughly $85 billion in capital expenditures in 2025, which is aimed at building up technical infrastructure, primarily for servers, followed by data centers and networking.
Alphabet currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to start accumulating the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.