Google parent Alphabet (GOOGL) delivered third-quarter earnings and revenue that handily beat consensus estimates while internet search advertising and cloud computing revenue came in well above expectations. Google stock soared to a record high on the news in early trading on Thursday.
Over a dozen Wall Street firms on Thursday hiked price targets on Google stock.
On the stock market today, Google stock hit a record high of 291.59 after the market open, then pared gains. Shares gained 2.5% to close at 281.48 as the Nasdaq composite retreated. Heading into the Google earnings report, shares had advanced over 43% in 2025, rebounding from a rough start.
Reported after the market close on Wednesday, Google earnings for the quarter ending Sept. 30 rose 35% to $2.87 per share. The tech giant reports Google earnings under generally accepted accounting principles, also known as GAAP.
In Q3, Google’s gross revenue rose 16% to $102.35 billion. Analysts polled by FactSet had projected EPS of $2.26 on revenue of $99.94 billion.
Google Earnings: Search Results
Also, Google’s Q3 internet search-advertising revenue rose over 14% to $56.57 billion versus estimates of $55.05 billion.
Further, Google reported cloud-computing revenue climbed 33.5% to $15.16 billion versus estimates of $14.70 billion. Google Cloud’s order backlog jumped 82% from a year earlier to $155 billion.
“The big learning for today was on Cloud, where a disclosed backlog of $155 billion (50% to 55% likely to be turned into revenue in the next two years) sets Google up to be a substantially larger company than investors had expected,” said UBS analyst Stephen Ju in a report.
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Meanwhile, YouTube ad revenue rose 15% to $10.26 billion versus estimates of $10 billion.
“All key revenue lines (total advertising, search, YouTube Ads, cloud) reported accelerating growth – a very impressive accomplishment,” said Evercore ISI analyst Mark Mahaney in a report.
Google increased its 2025 capital spending estimate by 8% to $92 billion at the midpoint, up from prior guidance of $85 billion and $75 billion. Most capital spending goes toward artificial intelligence cloud infrastructure.
“While capex guidance was increased, we suspect investors will give the company a pass as this is being earmarked to satisfy growing cloud infrastructure demand, as well as AI investments,” said Deutsche Bank analyst Benjamin Black in a report.
OpenAI Competition
Potential disruption of Google’s core internet search business amid the emergence of generative artificial intelligence and new rivals such as OpenAI remains an issue for Google stock. OpenAI recently unveiled an AI-powered web browser called ChatGPT Atlas and is expected to add advertising.
Google began deploying AI Overviews in the U.S. in mid-2024, with conversational summaries topping links for many search queries. The long-range question is how Google search ad revenue growth will be impacted by the AI Overviews format.
At TD Cowen, analyst John Blackledge is upbeat on Google’s core business.
“Search query growth accelerated year-over-year in Q3, driven by AI Overviews and AI Mode,” he said in a report. “Management also noted that AI Overviews are increasingly driving query growth among younger users. AI Mode queries doubled quarter-over-quarter and AI Mode surpassed 75 million U.S. daily average users. Meanwhile, Google’s Gemini app userbase grew to 650 million users in Q3, up from 450 million users in July.”
Google is among AI stocks to watch.
In September, a federal judge ruled that no Google asset divestitures will be required as part of remedies in an antitrust case involving the tech giant’s internet search business.
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GOOGL Stock Technical Ratings
Also, Google stock owns an Accumulation/Distribution Rating of B-plus. The institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Further, Alphabet stock holds an IBD Composite Rating of 98 out of a best possible 99, according to IBD Stock Checkup.
IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, quantum computing, cybersecurity and cloud computing.
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