Google Stock Defies Tech Slump: Continued Growth Ahead?
Google (Alphabet) recently released impressive Q1 results that exceeded market expectations, with revenues of $90.23 billion and earnings of $2.81 per share compared to consensus estimates of $89.12 billion and $2.01 respectively. The 12% year-over-year revenue growth was primarily driven by the cloud business, which saw a robust 28% increase to $12.3 billion. Google Search revenue grew 10% to $50.7 billion, while YouTube ad revenue also increased 10% to $8.9 billion.
The company demonstrated strong operational efficiency with its operating margin expanding 200 basis points year-over-year to 34%. This margin expansion, combined with higher revenue, contributed to a remarkable 49% rise in earnings per share. The market responded positively to these results, with GOOG stock surging 5% in after-hours trading following the announcement.
Still, if you are looking for an upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
Google continues to make significant strides in its autonomous driving technology. Waymo, its self-driving car unit, now provides more than 250,000 fully autonomous paid rides weekly across San Francisco, Los Angeles, Phoenix, and Austin regions, up from 200,000 in February before expanding to additional locations.
Despite the strong quarterly performance, GOOG stock has mirrored the broader NASDAQ's struggles in 2025, with returns of approximately -15% since the beginning of the year (as of April 24) compared to NASDAQ's 11% decline. These challenges stem from ongoing tariff concerns, trade war tensions, and geopolitical uncertainties affecting the tech sector as a whole.
The company remains committed to its AI strategy, planning to spend $75 billion in capital expenditures this year, while also authorizing a $70 billion share buyback plan. Investors remain optimistic about the potential AI-driven growth for Google's advertising business, which could drive future revenue expansion.
At post-earnings levels around $169, Google trades at 5.9x trailing revenues and 19x trailing earnings, both slightly below the stock's five-year average P/S ratio of 6.2x and P/E ratio of 24x. Given Alphabet's promising earnings growth potential from its AI initiatives and the ongoing momentum in its cloud division, we believe that the company warrants a premium valuation multiple compared to its historical average.
Also, Google has shown mixed resilience during recent market downturns. During the 2022 inflation shock, GOOG stock fell 44.6% compared to the S&P 500's 25.4% decline. In contrast, during the COVID-19 pandemic in 2020, GOOG fell 30.8% versus the S&P 500's 33.9% decline, demonstrating slightly better performance than the broader market.
Several risk factors could impact Google's performance moving forward:
Google presents a compelling investment case despite current market challenges. The company's Q1 results demonstrate continued execution excellence, particularly in high-growth segments like cloud computing and AI integration. While the stock has faced pressure this year alongside the broader tech sector, its current valuation appears attractive relative to historical averages and future growth potential.
The commitment to significant capital expenditures signals confidence in long-term growth initiatives, particularly in AI. Though risks exist regarding datacenter costs and potential advertising sensitivity to economic conditions, Google appears better positioned than many tech peers to weather tariff and trade tensions. For investors seeking exposure to AI-driven growth and cloud computing expansion, Google's current valuation presents an attractive entry point, especially for those with a long-term investment horizon.
Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
12 minutes ago
- Business Insider
CFRA Remains a Hold on Ballard Power Systems (BLDP)
CFRA analyst Brooks Idlet reiterated a Hold rating on Ballard Power Systems today and set a price target of $1.90. The company's shares closed today at $1.80. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. According to TipRanks, Idlet is ranked #7842 out of 9897 analysts. In addition to CFRA, Ballard Power Systems also received a Hold from Roth MKM's Craig Irwin in a report issued today. However, on the same day, TD Cowen maintained a Sell rating on Ballard Power Systems (NASDAQ: BLDP). The company has a one-year high of $2.28 and a one-year low of $1.00. Currently, Ballard Power Systems has an average volume of 8.6M.
Yahoo
2 hours ago
- Yahoo
If You'd Invested $1,000 in Pfizer (PFE) Stock 3 Years Ago, Here's How Much You'd Have Today
Key Points Those who invested in Pfizer three years ago and hung on are not thrilled. They would have done much better with a simple S&P 500 index fund. Still, Pfizer today offers a fat dividend and plenty of growth potential. 10 stocks we like better than Pfizer › Wondering how well you'd have done if you'd invested in pharmaceutical giant Pfizer (NYSE: PFE) three years ago and hung on? Well, I'm afraid the answer isn't pretty: If you'd investing $1,000 in Pfizer on Aug. 8, 2022, hung on and reinvested dividends, that sum would have been worth $585 on Aug. 8, 2025. Ouch! For some context, during those same three years, the S&P 500 index of 500 of America's biggest companies averaged gains of roughly 17% per year, turning $1,000 into $1,615. Here's some good news, though: Stock investors need to look forward much more than backward. Trailing returns are in the past. What matters most for current Pfizer investors and would-be Pfizer investors is how the company will perform from here on. And Pfizer's future is looking promising. Some investors have been disappointed in Pfizer when they've compared recent results to those from the past. But those past years were exceptional boom years thanks to Pfizer's COVID-19 vaccine and Paxlovid COVID-19 treatment. Those were in great demand, but demand has fallen. Others worry because some of Pfizer's big sellers, such as Eliquis, Ibrance, Inlyta, Xeljanz, Xtandi, and Vyndaqel, are coming off patent protection in the next few years. Pfizer has been planning for that, and investing in its pipeline, which features more than 100 active programs -- many of which are in oncology. Pfizer has also been getting additional approvals for its drugs, and it has been cutting its costs in an effort to boost profitability. Finally, Pfizer is a dividend-paying stock, with a whopping recent dividend yield of 7%. So as you invest in Pfizer and wait for its investments to pay off, you'll be rewarded. Should you invest $1,000 in Pfizer right now? Before you buy stock in Pfizer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Pfizer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 11, 2025 Selena Maranjian has positions in Pfizer. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy. If You'd Invested $1,000 in Pfizer (PFE) Stock 3 Years Ago, Here's How Much You'd Have Today was originally published by The Motley Fool
Business Upturn
2 hours ago
- Business Upturn
Highview Merger Corp. Announces Pricing of $200,000,000 Initial Public Offering
Delray Beach, FL, Aug. 11, 2025 (GLOBE NEWSWIRE) — Highview Merger Corp. (the 'Company') announced today that it priced its initial public offering of 20,000,000 units at a price of $10.00 per unit. Each unit consists of one Class A ordinary share and one-half of one redeemable warrant, each whole warrant exercisable to purchase one Class A ordinary share at a price of $11.50 per share. Only whole warrants will be exercisable. The units will be listed on The Nasdaq Global Market ('Nasdaq') and trade under the ticker symbol 'HVMCU' beginning August 12, 2025. Once the securities comprising the units begin separate trading, the Class A ordinary shares and warrants are expected to be listed on Nasdaq under the symbols 'HVMC' and 'HVMCW,' respectively. The offering is expected to close on August 13, 2025, subject to customary closing conditions. The Company is a special purpose acquisition company formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The Company is led by Chief Executive Officer and Chief Financial Officer, David Boris, and President, Taylor Rettig. Jefferies is acting as the sole book running manager for the offering. The Company has granted the underwriters a 45-day option to purchase up to an additional 3,000,000 units at the initial public offering price to cover over-allotments, if any. The offering is being made only by means of a prospectus. Copies of the prospectus may be obtained, when available, from Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, 2nd Floor, New York, NY 10022, or by telephone at 877-821-7388 or by email at [email protected]. A registration statement relating to these securities has been declared effective by, the Securities and Exchange Commission (the 'SEC') on August 11, 2025. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any State or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State or jurisdiction. CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS This press release contains statements that constitute 'forward-looking statements,' including with respect to the initial public offering and search for an initial business combination. No assurance can be given that the offering discussed above will be completed on the terms described, or at all, or that the proceeds of the offering will be used as indicated. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company's registration statement for the initial public offering filed with the SEC. Copies are available on the SEC's website, The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. ContactDavid Boris(561) 826-6050 [email protected]
