Alphabet’s (GOOGL) Google has long been viewed as a solid investment candidate, boasting a stunning 438% stock gain over the past decade fueled by growth in advertising and cloud services. But 2025 hasn’t been so kind to the tech giant. GOOGL stock is stuck deep in the red this year, as mounting regulatory pressure and global tariff tensions weigh heavily on the company. On top of that, the growing popularity of generative artificial intelligence (AI) tools like OpenAI’s ChatGPT is reshaping how people search, posing a direct threat to Google’s core search engine business like never before.
Even its latest earnings report, published in early February, did little to soothe investor concerns, weighed down by ballooning AI-related capital expenditures planned for this year. Skepticism grew over the tech giant’s massive AI spending, especially as Chinese AI firm DeepSeek unveiled a ChatGPT-like model earlier this year that promises similar performance at a fraction of the cost. However, as the countdown for its quarter one earnings begins, should investors start paying attention to this search engine giant again?
About Google Stock
With a massive market cap of around $1.8 trillion, Alphabet’s (GOOGL) tech dominance is impossible to miss. What started with a search engine has evolved into a sprawling empire, spanning cloud computing, AI, ad-fueled streaming, self-driving cars, and even healthcare breakthroughs.
Despite its commanding presence, Google’s stock has hit a rough patch in 2025, down about 20% year-to-date, outpacing the broader S&P 500 Index’s ($SPX) 10.3% slide so far this year. Zoom out, the picture doesn’t improve much. Over the past year, Google shares have dipped 3.6%, while the broader index has climbed 5.3% during the same stretch.
Google’s Q4 Earnings Snapshot
Following a mixed fourth-quarter earnings report revealed on Feb. 4, Google shares took a nosedive, plunging roughly 7.3% the very next trading session. Revenue rose a healthy 11.8% year over year to $96.5 billion, but that still fell just shy of Wall Street’s $96.7 billion mark. On the bright side, earnings per share jumped a solid 31.1% year over year to $2.15, slightly beating estimates of $2.12.
Google’s growth story in Q4 was largely driven by its core strength, advertising. The ad business alone generated a massive $72.5 billion, accounting for 76% of total revenue and marking a 10.6% year-over-year climb. Google Search continued to be a strong performer, pulling in $54 billion with a 12.5% annual jump, while YouTube ad revenue shot up 13.8% year over year to $10.5 billion, proving its staying power in the digital video space.
The company’s cloud segment also flexed its muscles, growing 30% year-over-year to reach $11.9 billion, as demand for AI and enterprise solutions continues to rise. But not everything in Google's portfolio was a win. The company’s “Other Bets” segment, which includes ambitious ventures like Verily and Waymo, took a hit. Revenue from this category plunged over 39% to $400 million, down from $657 million a year ago.
Dear Google Stock Fans, Mark Your Calendars for April 24
However, even after an overall healthy Q4 earnings report, investors remained unimpressed. While Google’s revenue miss certainly didn't bode well, the company’s aggressive AI spending amid the rise of a cheaper Chinese AI model was even more concerning. With AI at the heart of the next tech revolution, Google isn’t holding back, unveiling plans to unleash a jaw-dropping $75 billion in capital expenditures for 2025.
With a whopping $16 billion to $18 billion earmarked for just the first quarter, the bulk of this spending will go toward supercharging its AI infrastructure, scaling up servers, expanding data centers, and boosting networking muscle to fuel its bold, AI-driven future. The tech giant is gearing up to unveil its fiscal Q1 2025 earnings after the bell on April 24.
Ahead of this event, analysts are eyeing a 6.4% year-over-year bump in EPS to $2.01. Over the longer term, analysts project Google’s profit to improve by almost 8.3% annually to $8.71 per share in fiscal 2025 and grow another 15% to $10.01 per share in fiscal 2026.
What Do Analysts Expect for Google Stock?
Wall Street still appears largely bullish on GOOGL stock, maintaining a “Strong Buy” rating overall. Of the 53 analysts offering recommendations, 41 advocate a “Strong Buy,” three give a “Moderate Buy,” and the remaining nine suggest a “Hold.” The average analyst price target of $202.06 represents potential upside of 33.8%, while the Street-high target of $240 suggests a 59% rally from current levels.
