Analysts react to Google parent Alphabet's robust second-quarter earnings

CNBC

24-07-2025

Analysts on the Street are impressed by Google parent Alphabet 's second-quarter results, with a handful raising their estimates on the stock. Alphabet on Wednesday exceeded top- and bottom-line estimates , and saw its overall revenue jump 14% year over year — higher than the 10.9% Wall Street expected. The company also expects more AI-related spending, lifting its capital expenditures forecast for 2025 due to "strong and growing demand for our Cloud products and services." The robust results quelled investors fears that the search engine giant's AI strategy is flailing compared to peers, particularly as chatbots such as OpenAI and Perplexity compete in the growing online search market. Several analysts reiterated their bullish ratings on shares while lifting their estimates, as they remain optimistic in Google's cloud growth and uptick in AI Overviews monthly users gains. Here's a look at what some had to say: Morgan Stanley reiterates overweight rating, lifts price target by $5 to $210 Analyst Brian Nowak is confident in Google's accelerating cloud revenue growth and the company's updated AI-based engagement metrics. His new price target suggests about 10.4% potential upside. "Search, YouTube and Google Cloud all accelerated as GenAI-enabled innovation is driving faster growth," he wrote in a Thursday note to clients. "Our EPS ests are largely unchanged (revenue higher offset by higher D & A/investment) but we remain OW as this accelerated pace of innovation sets up GOOGL for more durable multi-year growth." Goldman Sachs keeps buy rating, raises price target by $9 to $234 Analyst Eric Sheridan said he sees Alphabet as well-positioned in current and future computing landscapes. "We continue to be of the view (contrary to some negative investor sentiment currently) that Alphabet can successfully navigate the current multi-year evolution of its core Search product by leveraging its current strengths," Sheridan wrote in a note. "We found Alphabet mgmt team's commentary on the earnings call supportive of a multi-surface approach to AI ... In addition, we see the company's Cloud business as poised to benefit over the medium-to-long term." Deutsche Bank maintains buy rating, lifts price target by $15 to $215 Analyst Benjamin Black's price target suggests about 13% potential upside. Black increased his forward revenue growth forecast, driven by increased growth expectations in Google's search and cloud businesses. "Engagement with Alphabet's AI Overview (AIO) has been particularly strong, especially among younger users, driving incremental queries and demonstrating solid monetization, even at this early stage of adoption," the analyst said in a note. "AIOs have already reached over 2bn MAUs globally, and are contributing to over 10% of incremental query growth where available, which suggests there is significant room for upside as adoption increases." JPMorgan: reiterates overweight rating, raises price target by $32 to $232 JPMorgan's Doug Anmuth is sticking behind Alphabet after noting that Google AI search products have continued to scale. He added that although Google's 2025 capex outlook increased by $10 billion to $85 billion, he believes it is a strong sign of growing AI demand and "better ability for Google to invest given improving access to AI infrastructure." "Google delivered what we believe is a defining quarter w/32% Google Cloud revenue growth, increasing scale of AI search products, and greater benefits from AI across every part of the business," Anmuth said in a Thursday note. "We believe the combination of strong AI-driven Cloud demand and accelerating backlog makes Google Cloud a bigger driver of the bull case going forward."