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.
AI & Security Push Aids Google Cloud: What's Ahead for GOOGL Stock?
Read MoreHide Full Article
Key Takeaways
GOOGL's Google Cloud now drives over 14% of revenue, with nine-month sales up 31.2% to $41.04B.
GOOGL is seeing over 200% YoY growth from products built on its Gen AI models like Gemini and others.
GOOGL plans $91B$93B in 2025 capex to expand AI infrastructure as cloud competition intensifies.
Alphabet (GOOGL - Free Report) is riding on a strong Google Cloud prospect, which accounts for more than 14% of GOOGL’s revenues. In the trailing nine-month period ended Sept. 30, Google Cloud revenues jumped 31.2% over the same year-ago time frame to $41.04 billion. The top line benefited from growth in Google Cloud Platform (GCP) across core products, AI Infrastructure and generative AI (Gen AI) Solutions. Cloud backlog jumped 46% sequentially to $155 billion at the end of the third quarter of 2025. The AI and security push is expected to boost Google Cloud’s prospects in the near term.
Alphabet’s expanding AI infrastructure is helping Alphabet win enterprise clients. GCP’s prospects remain robust, driven by strong demand for enterprise AI infrastructure, including TPUs (led by seventh-generation Ironwood) and GPUs, enterprise AI solutions driven by demand for the latest Gemini and other AI models, and other services, including cybersecurity and data analytics. Google Cloud is also benefiting from strong Gen AI adoption due to leading models, including Gemini, Imagen, Veo, Chirp and Lyria. In the third quarter of 2025, revenues from products developed on Google’s Gen AI models surged more than 200% year over year.
Security push is expected to drive Google Cloud’s top-line growth further. The addition of Wiz (acquisition pending, expected to complete in 2026) to Google Cloud will boost competitive prowess against the likes of Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) in the cloud computing space. The latest collaboration between Google Cloud and Palo Alto Networks combines Google Cloud’s AI and infrastructure capabilities with Prisma AIRS, the latter’s comprehensive AI security platform. Accelerating investments bodes well for GOOGL’s prospects. Alphabet expects capital expenditure between $91 billion and $93 billion for 2025, which is anticipated to increase further in 2026.
GOOGL Faces Tough Competition in Cloud Domain
Per Synergy Research Group data, Amazon’s share in the worldwide cloud infrastructure market amounted to 29% in the third quarter of 2025, ahead of Microsoft’s Azure platform at 20% and Google Cloud at 13%.
Amazon is spending heavily on fortifying its Amazon Web Services (AWS) infrastructure that supports AI workloads and expanded data center capacity. Amazon committed $125 billion in capital expenditure for 2025, with the vast majority directed toward AWS infrastructure. The third quarter alone saw $34.2 billion in cash capex, while the company added 3.8 gigawatts of power capacity over 12 months, the largest expansion in cloud history.
In the first quarter of fiscal 2026, Microsoft Azure and other cloud services revenues accelerated 40% in constant currency (cc), with management attributing significant contributions to AI-related demand. Microsoft Cloud revenues reached $49.1 billion, increasing 25% in cc and reflecting strong enterprise adoption of cloud infrastructure and AI capabilities. Spending is expected to accelerate throughout fiscal 2026, with roughly half to be spent on GPUs and CPUs, to support increasing Azure platform demand and AI workload expansion.
Alphabet shares have appreciated 60.5% in the trailing 12 months, outperforming the broader Zacks Computer and Technology sector’s return of 21.6%.
GOOGL Stock Outperforms Sector
Image Source: Zacks Investment Research
The GOOGL stock is trading at a premium, with a forward 12-month price/sales of 9.67X compared with the broader sector’s 6.55X. Alphabet has a Value Score of D.
GOOGL Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings is pegged at $10.58 per share, unchanged over the past 30 days, suggesting 31.6% growth from fiscal 2024’s reported figure.
Image: Bigstock
AI & Security Push Aids Google Cloud: What's Ahead for GOOGL Stock?
Key Takeaways
Alphabet (GOOGL - Free Report) is riding on a strong Google Cloud prospect, which accounts for more than 14% of GOOGL’s revenues. In the trailing nine-month period ended Sept. 30, Google Cloud revenues jumped 31.2% over the same year-ago time frame to $41.04 billion. The top line benefited from growth in Google Cloud Platform (GCP) across core products, AI Infrastructure and generative AI (Gen AI) Solutions. Cloud backlog jumped 46% sequentially to $155 billion at the end of the third quarter of 2025. The AI and security push is expected to boost Google Cloud’s prospects in the near term.
Alphabet’s expanding AI infrastructure is helping Alphabet win enterprise clients. GCP’s prospects remain robust, driven by strong demand for enterprise AI infrastructure, including TPUs (led by seventh-generation Ironwood) and GPUs, enterprise AI solutions driven by demand for the latest Gemini and other AI models, and other services, including cybersecurity and data analytics. Google Cloud is also benefiting from strong Gen AI adoption due to leading models, including Gemini, Imagen, Veo, Chirp and Lyria. In the third quarter of 2025, revenues from products developed on Google’s Gen AI models surged more than 200% year over year.
Security push is expected to drive Google Cloud’s top-line growth further. The addition of Wiz (acquisition pending, expected to complete in 2026) to Google Cloud will boost competitive prowess against the likes of Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) in the cloud computing space. The latest collaboration between Google Cloud and Palo Alto Networks combines Google Cloud’s AI and infrastructure capabilities with Prisma AIRS, the latter’s comprehensive AI security platform. Accelerating investments bodes well for GOOGL’s prospects. Alphabet expects capital expenditure between $91 billion and $93 billion for 2025, which is anticipated to increase further in 2026.
GOOGL Faces Tough Competition in Cloud Domain
Per Synergy Research Group data, Amazon’s share in the worldwide cloud infrastructure market amounted to 29% in the third quarter of 2025, ahead of Microsoft’s Azure platform at 20% and Google Cloud at 13%.
Amazon is spending heavily on fortifying its Amazon Web Services (AWS) infrastructure that supports AI workloads and expanded data center capacity. Amazon committed $125 billion in capital expenditure for 2025, with the vast majority directed toward AWS infrastructure. The third quarter alone saw $34.2 billion in cash capex, while the company added 3.8 gigawatts of power capacity over 12 months, the largest expansion in cloud history.
In the first quarter of fiscal 2026, Microsoft Azure and other cloud services revenues accelerated 40% in constant currency (cc), with management attributing significant contributions to AI-related demand. Microsoft Cloud revenues reached $49.1 billion, increasing 25% in cc and reflecting strong enterprise adoption of cloud infrastructure and AI capabilities. Spending is expected to accelerate throughout fiscal 2026, with roughly half to be spent on GPUs and CPUs, to support increasing Azure platform demand and AI workload expansion.
GOOGL’s Share Price Performance, Valuation & Estimates
Alphabet shares have appreciated 60.5% in the trailing 12 months, outperforming the broader Zacks Computer and Technology sector’s return of 21.6%.
GOOGL Stock Outperforms Sector
Image Source: Zacks Investment Research
The GOOGL stock is trading at a premium, with a forward 12-month price/sales of 9.67X compared with the broader sector’s 6.55X. Alphabet has a Value Score of D.
GOOGL Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings is pegged at $10.58 per share, unchanged over the past 30 days, suggesting 31.6% growth from fiscal 2024’s reported figure.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Alphabet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.