Alphabet Google (NASDAQ:GOOG) Stock Earnings Drive Bullish Price Outlook at $203.03
Q2 2025 shows $83.7B revenue, AI-led margin gains, and a Buy rating with targets up to $220 | That's TradingNEWS
Alphabet’s Q2 2025 Earnings Show Resilient Revenue Growth with Price Upside
Alphabet Inc. (NASDAQ:GOOG) closed the latest session at $203.03, down 0.55% on the day yet still near its all-time high. Q2 2025 revenue reached $83.7 billion, an 11.3% rise from $75.2 billion a year earlier. The Google Search segment, which drives more than 58% of total revenue, climbed to $48.9 billion from $44.3 billion, supported by rising advertiser demand and stronger cost-per-click rates, especially in AI-driven shopping ads and travel. YouTube revenue advanced 12% to $9.6 billion as Shorts monetization improved and long-form ad pricing stabilized.
Operating Margins Expand as AI Investments Deliver Efficiency Gains
Operating income came in at $26.8 billion, representing a 32% margin versus 28% last year. This gain came despite heavy investment in AI infrastructure. Total operating expenses were $56.9 billion, with R&D at $14.2 billion, up 11% year-over-year, reflecting accelerated development of the Gemini AI platform, expanded TPU chip manufacturing, and additional AI data center capacity in the U.S. and Europe. Capex rose to $12.5 billion from $10.3 billion, reinforcing Alphabet’s competitive edge in AI model training.
Advertising Segment Maintains Robust Momentum
Google Network ad revenue increased to $9.3 billion from $8.4 billion, benefiting from AI-based contextual targeting that boosted click-through rates by 7%. Retail and travel advertisers reached multi-quarter highs, while demand from AI software companies for premium ad slots surged. Alphabet maintained its lead over Meta (NASDAQ:META) and TikTok by integrating AI deeper into ad campaign optimization, lifting ROI for clients.
Google Cloud’s AI Integration Accelerates Growth and Margins
Google Cloud revenue climbed to $10.4 billion, up 27% year-over-year, beating growth rates at AWS (NASDAQ:AMZN) and closing ground on Azure (NASDAQ:MSFT). Operating profit rose to $1.4 billion from $0.8 billion, supported by demand for Vertex AI, Duet AI, and enterprise AI hosting. Backlog orders surpassed $43 billion, with long-term contracts from finance, healthcare, and manufacturing sectors strengthening revenue visibility.
Other Bets See Revenue Uptick but Still Drag on Profitability
Other Bets revenue rose to $592 million from $454 million, while operating losses narrowed to $1.6 billion. Waymo expanded into three more U.S. cities and struck preliminary agreements with two automakers for 2026 integration. Though still unprofitable, these initiatives enhance Alphabet’s innovation portfolio.
Shareholder Returns Reinforce Confidence in Stock Price Outlook
Alphabet repurchased $15 billion in Class A and Class C shares in Q2, bolstering EPS growth. Insider data from Alphabet Insider Transactions show net insider buying, a bullish sign that leadership sees upside beyond current levels. With $25 billion in quarterly free cash flow, Alphabet can sustain buybacks without slowing capex.
Valuation: GOOG Trading Below Peer Multiples Despite Growth Strength
At $203.03 per share, Alphabet’s market cap is $2.48 trillion, with a forward P/E of 24.8, under the mega-cap tech average of 27.5. The PEG ratio at 1.36 suggests attractive growth relative to valuation. Over the past year, GOOG gained 31%, outpacing the S&P 500’s 17%. The median analyst target is $210, with bullish projections up to $220 if AI momentum holds.
Technical Setup: Key Support and Resistance Levels in Focus
GOOG has solid support at $198.50, with secondary support at the 50-day moving average around $195.00. Immediate resistance is at $205.70—a breakout could open a path to $210 and potentially $215–$220. Live movements are tracked on the GOOG Real-Time Chart, showing continued accumulation days, signaling institutional buying strength.
Final Investment Verdict: Buy for AI-Driven Growth and Strong Financials
With double-digit revenue growth, margin expansion, a valuation discount to peers, and heavy AI investment, GOOG earns a Buy rating. Near-term risks include regulatory pressures and macro-linked ad spending slowdowns, but Alphabet’s scale, cash flow, and tech leadership provide a clear path to $210–$220 over the next 6–12 months.
