Google-parent Alphabet is the IBD Stock of the Day ahead of its third quarter earnings report. Google stock trades near a record high as more investors view the tech behemoth as a likely winner in artificial intelligence despite rising competition.
On the stock market today, shares of the search giant climbed a fraction to close at 251.46.
Google stock has gained more than 34% in 2025 after rebounding from a lackluster first half of the year. It trades just below its all-time high of 256, set in intraday trading on Sept. 19. In September, Alphabet climbed over the $3 trillion valuation milestone for the first time.
From a technical view, Google stock has rebounded from the 21-day exponential average. That's a bullish indicator. In an exponential moving average, the most recent price action carries a higher weighting.
Investors may want to be cautious ahead of the company's quarterly report, due on Oct. 29. One strategy to help minimize risk around earnings is to use call options.
"Google's gen AI product strategy is likely to be a key focus during the earnings call and we believe product velocity is ramping," said Citi analyst Ronald Josey in a report.
Google Stock: AI Competition
The impact of generative artificial intelligence on the internet search advertising business of Google remains a key issue for investors. 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 web links.
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.
While ChatGPT has posed a threat in consumer search, analysts say the battle will shift to e-commerce and other areas.
"ChatGPT's commercial query offerings and agentic search products are coming and they are going to improve," said Morgan Stanley analyst Brian Nowak in a report. "We expect ChatGPT to continue to ship new products to try to bring commercial behavior onto its platform. Google's accelerating pace of product improvement is going to make it challenging for ChatGPT to build a substantially differentiated product."
Sum-Of-Parts Valuation
Google recently launched "Gemini Enterprise," a conversational AI platform for businesses to interact with their internal data and easily build AI agents. It's a subscription-based product with monthly fees. In the announcement post, Google noted that 65% of its cloud computing customers are using AI products.
While internet search is still Google's core business, more analysts are factoring in other parts of Alphabet in its valuation.
Evercore ISI analyst Mark Mahaney holds an outperform rating on Google stock. "We have greater confidence that Google search revenue growth will sustain double-digit percent growth; that YouTube ad revenue will accelerate modestly, that Google Cloud growth will remain above 30%, and that the attributed value to Waymo will raise materially in the medium-term."
He added: "The financial so-what of all this is that Google should be able to sustain high-teens and possibly 20% EPS growth."
Google Stock: Antitrust Cases
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.
The IBD Methodology: How To Invest In Stocks While Managing Risks
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.
At BMO Capital Markets, analyst Brian Pitz expects a good outcome. "Judge Brinkema, who had previously signaled openness to a breakup, suggested that a court-enforced settlement would better restrict Google's conduct rather than a forced divestiture," Pitz said in a report. "We continue to believe that a structural remedy is a more likely outcome, which would pave the way for limited antitrust disruption to Google's business."
In March, Alphabet agreed to buy fast-growing cybersecurity firm Wiz in an all-cash $32 billion deal. One question for Google stock is whether the Wiz purchase will boost cloud computing market share versus Amazon.com and Microsoft.
Google Stock Technical Ratings
The company's Relative Strength rating currently stands at 88 out of a best-possible 99, according to IBD Stock Checkup. The best growth stocks tend to have an RS rating of 80 or better.
Google stock holds an Accumulation/Distribution Rating of B. That gauges institutional buying and selling of the stock over the past 13 weeks. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Further, shares hold 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.
Meanwhile, GOOGL stock has a stellar 21-day ATR of 2.29%. 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.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
