Wall Street cheered Alphabet's first quarter earnings report. In May, what possible catalysts could send Google stock higher? Investors mulling whether to buy GOOGL stock should eye a software developers conference and a marketing event for news on the artificial intelligence front.
The Google I/O developers conference is set for May 20-21. Also, the Google Marketing Live event is slated for May 21. What's more, YouTube hosts an event for advertisers on May 14.
Meanwhile, Alphabet stock has retreated about 13% in 2025 but shares gained in April.
Google delivered first quarter earnings and revenue that topped consensus estimates as internet search advertising growth beat expectations while cloud computing growth was virtually in-line and YouTube fell slightly short.
Further, Google reiterated $75 billion in 2025 capital spending in 2025 as it increases artificial intelligence investments. From an accounting view, high depreciation on data center servers is another concern because it lowers earnings. Analysts expect more cost cutting to offset rising depreciation.
In addition, Google is among artificial intelligence stocks to watch. As of March, Google's Gemini AI chatbot had 350 million active users worldwide.
On the AI news front, Google could be near a licensing deal with Apple for its artificial intelligence engine Gemini. Chief Executive Sundar Pichai said in a court hearing that Alphabet expects to strike a licensing deal with Apple by the middle of this year, with Gemini available on iPhones by the end of 2025.
Will Wiz Acquisition Boost Google Cloud?
For investors, the internet search business remains top of mind amid new artificial intelligence driven competition from OpenAI's ChatGPT and others. Further, Google began deploying AI Overviews in the U.S. in mid-2024, with conversational summaries topping links for many search queries.
On the Q1 earnings call with analysts, Google said AI Overviews now has over 1.5 billion monthly active users.
Google's cloud computing unit's revenue rose 28% in Q1. Cloud growth could accelerate as more AI infrastructure ramps up in the second half of 2025.
In March, Alphabet agreed to buy fast growing cybersecurity firm Wiz in an all-cash $32 billion deal. The big question for Google stock: will the Wiz purchase boost cloud computing market share versus Amazon.com and Microsoft?
Google Stock: Antitrust Worries
Meanwhile, antitrust lawsuits filed by the Department of Justice have pressured Google stock. Both Google's internet search and advertising businesses are under DoJ scrutiny.
A federal judge on April 17 ruled that Google has used monopoly-building tactics to dominate online advertising. The Department of Justice had claimed Google's dominance of the digital ad market has damaged advertisers and content creators. Alphabet said it plans to appeal.
The internet giant already is battling another antitrust lawsuit filed by the DoJ. Federal judge Amit Mehta last year ruled that Alphabet illegally maintained a monopoly over online search services and prevented rivals from developing their own products.
A key part of the ruling centered on multibillion-dollar payments that Google makes to Apple to be the default search engine on iPhones.
Judge Mehta is expected to decide what legal remedies are required by August. The DoJ has requested that Google be forced to sell its Chrome browser and take other measures, possibly involving Apple.
GOOGL Stock: Waymo Expands
Meanwhile, autonomous vehicle pioneer Waymo is a wild card for Google stock.
The ride-hailing service leader Waymo and Japanese carmaker Toyota have signed a preliminary agreement to explore the development of an autonomous vehicle platform as well as "personally owned vehicles.
The ride-hailing service leader Waymo keeps adding to its resume with market expansions and technology advances. Yet Wall Street has yet to price in Waymo's momentum in the valuation of Google stock.
In October, Waymo closed a $5.6 billion funding round, including Google and previous investors.
On Google's first quarter earnings call, Alphabet disclosed that Waymo has hit 250,000 paid robotaxi rides per week in the U.S., up from 200,000 in February.
In 2024, Waymo served over 4 million fully autonomous rides across Los Angeles, San Francisco and Phoenix. The company announced plans to expand to Austin and Atlanta this year and Miami in 2026.
Also in early 2025, Waymo said it would test its self-driving taxis in more than 10 new cities across the U.S., including Las Vegas and San Diego.
YouTube Vs. Disney, Netflix, TikTok
In terms of possible catalysts for Google stock, some analysts see upside from YouTube. At MoffetNathanson, analyst Michael Mathanson recently declared in a report: "We crown YouTube the 'New King of All Media'." He noted that in 2024, YouTube was the second-
largest media company by revenue at $54.2 billion, trailing only Walt Disney. He forecasts that YouTube will surpass Disney in 2025.
"If YouTube was a standalone business, public comparisons suggest the business would be worth $475 to $550 billion, or about 30% of Alphabet's current valuation," Nathanson said. "This leads us to the question of what's next and the untapped opportunity ahead. YouTube has the potential to become the central aggregator for all things professional video, positioning itself to capture a share of the $85 billion consumer pay TV market and the $30 billion streaming excluding Netflix market in the U.S."
Google aims to slow down the growth of TikTok with its own short video platform. How much money Google generates from YouTube Shorts is a key issue for 2025, analysts say.
Google Stock: Is It A Buy Or Sell Now?
Whether the internet giant is a buy depends on fundamental and technical factors as well as each investor's own goals, strategy and risk tolerance.
GOOGL stock popped 37% in 2024, though it pulled back from a high of 201.42 set on Dec. 17.
Also, the Relative Strength Rating of Alphabet stock currently stands at only 31 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better.
Google stock holds an Accumulation/Distribution Rating of C. That 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 80 out of a best possible 99. 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.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3% or below.
Also, as of May 5, Alphabet stock needs to form a new base to be actionable.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
