Google parent company Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) has Wall Street buzzing as its Q3 results shattered expectations and officially marked the company's first quarter clearing $100 billion in revenue.
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Q3 Results:
The transformative power of AI is rippling through all of Alphabet's major business lines and its Q3 performance was nothing short of historic.
Total revenue surged 16% year-over-year to $102.4 billion, net income soared 33% to nearly $35 billion, and earnings per share jumped 35% to $2.87.
Alphabet revealed Google Cloud revenue climbed 34% to $15.16 billion, Search revenue increased 14.5% to $56.57 billion and YouTube ad revenue grew 15% to $10.26 billion.
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Analysts React
Analysts responded enthusiastically to the headline accomplishments and Alphabet's announcements on capex spending, particularly for AI infrastructure.
Canaccord Genuity maintained its Buy rating on Alphabet and raised the price target from $270 to $330.
Canaccord Genuity's Maria Ripps noted that Alphabet's investments in AI had driven accelerating momentum across Search, YouTube and Cloud, with innovations like Gemini and AI Overviews powering product and monetization gains.
The firm raised its price target to $330 from $270. It noted that Alphabet increased its 2025 capital expenditures forecast to $91—$93 billion, up from a previous $85 billion, with an even steeper rise planned for 2026 as the company scaled up server, data center and network investment to cement AI leadership.
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Wedbush Securities reiterated an Outperform rating and raised its price target to $ 320 from $245.
Wedbush analysts Scott Devitt and Dan Ives described Alphabet's quarter as proof of its leading role in AI, with new tools like Gemini driving results in both advertising and cloud and leading to accelerating trends in query growth and customer demand.
Wedbush also underscored the AI-driven capital expenditures, citing Alphabet's decision to lift 2025 capex guidance to $91–$93 billion, aimed squarely at AI infrastructure and expanding cloud capacity.
Needham maintained a Buy rating on Alphabet and raised its price target from $260 to $330.
Needham's Laura Martin and Dan Medina wrote that Alphabet's “full-stack” generative AI strategy delivered both pricing power and margin expansion, with Gemini and AI Mode pushing both query volume and monetization in Search.
Needham called out Alphabet's dramatic 83% year-over-year jump in Q3 capex to $24 billion and revised 2025 capex forecast to $92 billion, with another significant leap forecast for 2026 to $115 billion, all reflecting surging Cloud and AI-related investment.
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KeyBanc Capital Markets reiterated an Overweight rating and lifted its price target from $300 to $330.
KeyBanc analyst Justin Patterson emphasized Alphabet's “full stack” AI advantage in a note titled "The AI Momentum Is Nanobananas."
He highlighted Alphabet's rapid scaling of Gemini and AI Mode and its strong results in core Search and Cloud.
Rosenblatt Securities maintained a Neutral rating on Alphabet shares and raised its price target from $224 to $279.
Rosenblatt Securities analyst Barton Crockett acknowledged Alphabet's strong quarter and AI rollouts (75 million DAUs for AI Mode, robust adoption for Gemini), but maintained caution about future competition in search from other AI leaders.
GOOG Price Action: According to data from Benzinga Pro, Alphabet shares were up 4.73% at $288.25 in midday trading on Thursday.
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