When investors mull upside for shares in Google-parent Alphabet, its cloud computing business is becoming a bigger part of the discussion. As it stands, the cloud business is a smaller part of the valuation of Google stock compared to Amazon.com and Amazon Web Services.
Google stock has gained 30% in 2025, after under-performing in the first half of the year. Google stock hit an all-time high of 256 on Sept. 19, climbing over the $3 trillion valuation milestone.
From a technical view, Google stock has pulled back a bit and trades just above its 21-day exponential average. In an exponential moving average, the most recent price action carries a higher weighting. If Google stock falls below the 21-day line in high trading volume, that would be a sell signal.
In addition, Google is among artificial intelligence stocks to watch.
Cloud Computing Gains Momentum
While investor angst over potential disruption of the core internet search business amid the emergence of generative artificial intelligence remains, Wall Street analysts are eyeing possible catalysts. That's where the cloud computing business comes in.
Google delivered second-quarter earnings and revenue that topped consensus estimates while internet search advertising and cloud computing revenue came in above expectations. Further, Google reported cloud-computing revenue of $13.62 billion versus estimates of $13.14 billion.
Google is leveraging artificial intelligence prowess in models, chips, agents and data security to grow its cloud computing business, said CEO Thomas Kurian, said at an industry technology conference in September. New customers include OpenAI, a leader in building AI models, and Meta Platforms.
One view is that Google's home-grown AI accelerator chips, called TPUs, are becoming a stronger rival to Nvidia.
While revenue growth could accelerate for the Google cloud computing business, another issue is profitability. Amazon's cloud business is a big part of the e-commerce giant's valuation because its cloud gross margins are high. Amazon Web Services is a major profit engine.
In March, Alphabet agreed to buy fast growing cybersecurity firm Wiz in an all-cash $32 billion deal. One view is that the Wiz purchase could boost Google's cloud computing market share versus Amazon and Microsoft
Google Stock: Antitrust Worries
In early September, Google stock rallied when a federal judge ruled that no asset divestitures will be required as part of remedies in an antitrust case involving the tech giant's internet search business.
After the search ruling, Google introduced new Gemini integration across its Chrome browser for all U.S. desktop users. Chrome now features native Gemini access via a dedicated button, allowing users to analyze information and content without switching windows.
However, a digital advertising antitrust case could turn out differently. In April, Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia ruled that Google has used classic 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.
In September, Brinkema held hearings to discuss possible remedies. The government has stated that Google should sell off its Google Ad Manager, which includes the company's publisher ad server and its ad exchange. The ad servers and the market for ad exchanges sit between buyers and sellers. Brinkema is expected to issue a remedies ruling in early 2026.
Big Changes In AI Search
In search, new competition from OpenAI's ChatGPT, Perplexity and others has forced Google to overhaul its search results. ChatGPT delivers answers to search queries, while Google's business model has been based on providing weblinks.
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. Google says AI Overviews now has over 1.5 billion monthly active users.
Many tech companies are focused on autonomous, goal-driven AI "agents" that complete tasks on their own. One of the big applications is expected to be online shopping on the behalf of consumers.
Google recently announced a new Agent Payments Protocol (AP2), developed with 60 industry partners. Further, AP2 is designed to address authorization, authentication, and accountability in agentic payments.
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.
One closely watched financial metric has been capital spending amid the AI boom. In July, Google said it expects capital spending to reach $85 billion in 2025, up from earlier guidance of $75 billion. With the updated guidance, capital spending is expected to jump 62% in 2025, up from a 43% increase.
From an accounting view, high depreciation on data center servers is one concern because it lowers earnings. Analysts expect more cost cutting to offset rising depreciation. Google is using AI internally for software coding projects, which could curb hiring.
Google Stock: Is It A Buy Or Sell Now?
Also, the Relative Strength Rating of GOOGL stock currently stands at only 88 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 A-minus. 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, GOOGL stock holds an IBD Composite Rating of 98 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.
Meanwhile, GOOGL stock has a 21-day ATR of 2.22. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
Also, as of Oct. 6, GOOGL stock needs to form a new cup base to be actionable.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
