Alphabet's Solid Earnings Boost Stock Price Targets Amid Regulatory and Competitive Concerns

Alphabet's Q2 earnings beat forecasts, with search revenue at $54.19 bln and ad revenue up 10% YoY. Cloud revenue jumped 32% to $13.62 bln, and the company raised its 2025 capital spending forecast to $85 bln. Analysts raised their stock price targets, with Bank of America setting a new target of $217 and JPMorgan at $232. Alphabet shares closed at $194.08, up 13% over the past month.

Alphabet Inc. (GOOGL) reported its second-quarter (Q2) earnings on Wednesday, July 1, 2025, with revenue and earnings beating Wall Street expectations. The company's total revenue rose by 11.7% to $54.19 billion, surpassing analyst estimates [1]. This growth was primarily driven by robust performance in the Google Cloud and YouTube segments.

YouTube, Alphabet's video platform, continued its impressive growth, with advertising revenue increasing by 13.1% year over year to $9.8 billion [4]. The standout performer in Alphabet's Q2 report was Google Cloud, which saw significant revenue growth, although the exact figure is not specified in the provided materials [1, 3]. The company's cloud computing business has been a key driver of growth, with revenue accelerating and other financial metrics improving. Analysts highlighted the strong performance of Google Cloud, with Oppenheimer analyst Jason Helfstein noting that it "absolutely crushed it" with 32% year-over-year growth [3].

Alphabet's strong Q2 performance led to an increase in its capital expenditure forecast for 2025. The company expects to spend approximately $85 billion in 2025, up from the previous guidance of $75 billion [2]. Much of this spending will go toward computer servers and other AI-related infrastructure, reflecting Alphabet's continued investment in its cloud business and AI capabilities.

The company's stock price reacted positively to the earnings report, gaining over 3.6% in early trading on Thursday, July 2. Google stock is currently trading at around $19.06, with a strong July performance that has brought it back to even levels for the year [3].

The company's net income increased to $28.20 billion, up nearly 20% from the previous year. Alphabet's search and advertising units still showed growth in the second quarter despite AI competition heating up. The company's search unit brought in $54.19 billion during the quarter, and its advertising revenue grew to $71.34 billion — up about 10.4% from $64.61 billion the year prior.

YouTube advertising revenue came in at $9.8 billion, higher than Wall Street expected. The company said its "Other Bets" segment, which includes its self-driving car unit Waymo and life sciences unit Verily, brought in $373 million — up from $365 million a year ago. Other Bets reported a loss of $1.25 billion, up from the $1.13 billion a year ago.

AI Overviews, Google's AI search product that summarizes search results, now has upward of two billion monthly users across more than 200 countries and territories, Pichai said during Wednesday's earnings call. That's up from 1.5 billion monthly users last quarter. The Gemini app, which has the company's AI chatbot, now has more than 450 million monthly active users, Pichai said.

Alphabet's latest earnings beat has prompted a wave of price target hikes from Wall Street analysts, though opinions split on how much upside is left. Bank of America analyst Justin Post raised his price target on Alphabet to $217 from $210 while maintaining a buy rating, following the company’s better-than-expected second-quarter results [3]. JPMorgan raised its price target on Alphabet to $232 from $200 and reiterated an overweight rating [3].

References:
[1] Reuters. (2025). Gaming and Leisure Properties Q2 Revenue Beats Estimates. Retrieved from https://www.tradingview.com/news/reuters.com,2025:newsml_PLX274254:0-gaming-and-leisure-properties-q2-revenue-beats-estimates/
[2] ConstellationR. (2025). Google Cloud Revenue Surges 32% in Q2. Retrieved from https://www.constellationr.com/blog-news/insights/google-cloud-tops-50-billion-annual-revenue-run-rate-q2
[3] Ink. (2025). Google Cloud Delivers Q2 Knockout, Sends Message to Amazon, Microsoft. Retrieved from https://www.inkl.com/news/google-cloud-delivers-q2-knockout-sends-message-to-amazon-microsoft
[4] Variety. (2025). YouTube Q2 2025 Earnings: Ad Revenue Rises 13%. Retrieved from https://variety.com/2025/digital/news/youtube-q2-2025-earnings-ad-revenue-alphabet-1236468214/