Alphabet C 2025 Q3 Earnings Surpasses Estimates as Net Income Jumps 33%

Alphabet C (GOOG) reported Q3 2025 earnings that exceeded expectations, with revenue rising 16% to $102.35 billion and net income surging 33% to $34.98 billion. The company raised its 2025 capital expenditure guidance to $91–$93 billion, reflecting heightened investments in AI infrastructure. CEO Sundar Pichai emphasized sustained momentum across core businesses and strategic AI-driven growth.

Revenue

Alphabet C’s revenue growth was driven by robust performance across key segments. Google Services generated $87.05 billion, fueled by advertising and subscription-based products. Google Cloud surged 34% to $15.16 billion, bolstered by enterprise AI demand and a $155 billion backlog. YouTube advertising climbed 15% to $10.26 billion, while Search & other advertising rose 14.5% to $56.57 billion. Network advertising declined 3% to $7.35 billion, while subscriptions, platforms, and devices contributed $12.87 billion. Other Bets and hedging activities added $344 million and -$207 million, respectively.

Earnings/Net Income

The company’s EPS increased 35% to $2.89, with net income reaching $34.98 billion—marking a 33% year-over-year jump. Sustained profitability for over two decades underscores operational resilience, driven by strategic investments and efficient cost management.

Price Action

The stock price of Alphabet C edged up 2.44% during the latest trading day, followed by an 8.97% increase during the most recent full trading week. Month-to-date, shares gained 12.61%, reflecting strong investor confidence in the company’s AI-driven growth trajectory. Analysts noted the outperformance against peers, with price targets raised to $305 by Sanford C. Bernstein and $330 by Canaccord Genuity.

Post-Earnings Price Action Review

Alphabet C’s shares experienced a significant post-earnings rally, driven by surpassing revenue and EPS estimates. The stock’s 5.57% intraday gain on October 30 highlighted market enthusiasm for the company’s AI-driven cloud expansion and strategic acquisitions. Analysts attributed the upward momentum to robust cloud revenue growth, a $155 billion backlog, and the acquisition of Wiz, a cloud security platform. However, currency volatility and U.S. election-related spending on YouTube advertising pose near-term challenges for the advertising segment.

CEO Commentary

CEO Sundar Pichai highlighted "double-digit growth across every major part of our business" during the earnings call, emphasizing AI’s role in driving real business results. He noted Google Cloud’s 34% revenue growth and the surge in $1 billion deals, including a $10 billion contract with Meta. CFO Anat Ashkenazi reiterated confidence in the company’s ability to maintain profitability amid increased capital expenditures for AI infrastructure.

Guidance

Alphabet C anticipates 2025 capital expenditures to range between $91 billion and $93 billion, reflecting a strategic shift toward AI infrastructure and data center expansion. The company expects foreign exchange to remain a tailwind for revenue, though currency volatility could moderate this impact. Guidance for the ongoing quarter includes potential headwinds in advertising revenue due to prior-year election-related spending on YouTube.

Additional News

Alphabet Inc. announced the acquisition of Wiz, a leading cloud security platform, to enhance Google Cloud’s offerings. The $5.5 billion deal, expected to close in 2026, aligns with the company’s focus on enterprise AI solutions. Additionally, Google secured a $10 billion cloud contract with Meta and a $10 billion AI infrastructure deal with Anthropic, leveraging its Tensor Processing Units (TPUs). The company also raised its capex guidance for the second time in 2025, signaling long-term commitment to AI infrastructure.

Alphabet’s Q3 results underscored its leadership in AI-driven enterprise solutions, with Google Cloud’s 34% revenue growth and a $155 billion backlog. The company’s strategic acquisitions and AI partnerships position it to capitalize on the rapidly expanding cloud and AI markets. Analysts highlighted the potential for sustained profitability as Alphabet continues to invest in infrastructure and innovation.

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