Alphabet's Cloud Business Booms with $10 Billion Deal

Alphabet's cloud business reported a 32% increase in revenues in Q2 2025, and the company recently agreed to provide cloud computing services to Meta Platforms for six years in a deal worth over $10 billion. Top investor Brett Ashton Green believes the demand for Alphabet's cloud infrastructure will continue to grow, and the deal with Meta opens up possibilities for further partnerships. However, there are risks, such as slowing growth in search and ads. Green remains committed to GOOGL, but suggests a Hold if the share price gains another 10%. Wall Street has a Strong Buy consensus rating with a 12-month average price target of $217.25.

Alphabet Inc.'s cloud business reported a significant 32% increase in revenues in Q2 2025, reflecting robust growth in the technology sector. The company has also secured a major cloud computing contract with Meta Platforms, valued at over $10 billion over six years, further underscoring its leadership in the cloud infrastructure market [2].

The deal with Meta, which has traditionally relied on Amazon Web Services (AWS) and Microsoft Azure, represents a strategic shift towards Alphabet's cloud services. This agreement not only solidifies Alphabet's position as a critical AI infrastructure provider but also opens up potential opportunities for further partnerships [3].

Brett Ashton Green, a top investor, believes that the demand for Alphabet's cloud infrastructure will continue to grow, driven by the increasing adoption of artificial intelligence workloads. However, he also cautions about potential risks, such as slowing growth in search and advertising revenues. Despite these concerns, Green remains committed to Alphabet Inc. but suggests a "Hold" rating if the share price gains another 10% [1].

The market has responded positively to Alphabet's recent achievements, with Wall Street maintaining a Strong Buy consensus rating and setting a 12-month average price target of $217.25. This optimism is driven by the company's aggressive investment in AI and cloud infrastructure, which has positioned Alphabet as a leader in the AI-first era.

Alphabet's strategic reinvention, focusing on AI infrastructure expansion, enterprise AI adoption, and consumer product innovation, is expected to drive long-term growth and value for investors. While regulatory risks and competitive pressures remain, the company's financial resilience, including a $95 billion cash reserve and projected $100 billion AI revenue by 2030, positions it well to navigate these challenges [2].

In conclusion, Alphabet's recent financial performance and strategic deals highlight its strong position in the cloud and AI markets. Despite potential risks, the company's strategic reinvention and commitment to innovation make it a compelling investment opportunity for long-term investors.

References:
[1] https://mlq.ai/news/alphabet-sets-new-milestone-with-25-trillion-market-cap-amid-robust-ai-fueled-growth/
[2] https://www.ainvest.com/news/alphabet-strategic-reinvention-ai-driven-growth-catalysts-2508/
[3] https://www.cnbc.com/2025/08/21/google-scores-six-year-meta-cloud-deal-worth-over-10-billion.html