AI & Security Push Aids Google Cloud: What's Ahead for GOOGL Stock?

Alphabet GOOGL is riding on a strong Google Cloud prospect, which accounts for more than 14% of GOOGL’s revenues. In the trailing nine-month period ended Sept. 30, Google Cloud revenues jumped 31.2% over the same year-ago time frame to $41.04 billion. The top line benefited from growth in Google Cloud Platform (GCP) across core products, AI Infrastructure and generative AI (Gen AI) Solutions. Cloud backlog jumped 46% sequentially to $155 billion at the end of the third quarter of 2025. The AI and security push is expected to boost Google Cloud’s prospects in the near term.Alphabet’s expanding AI infrastructure is helping Alphabet win enterprise clients. GCP’s prospects remain robust, driven by strong demand for enterprise AI infrastructure, including TPUs (led by seventh-generation Ironwood) and GPUs, enterprise AI solutions driven by demand for the latest Gemini and other AI models, and other services, including cybersecurity and data analytics. Google Cloud is also benefiting from strong Gen AI adoption due to leading models, including Gemini, Imagen, Veo, Chirp and Lyria. In the third quarter of 2025, revenues from products developed on Google’s Gen AI models surged more than 200% year over year. Security push is expected to drive Google Cloud’s top-line growth further. The addition of Wiz (acquisition pending, expected to complete in 2026) to Google Cloud will boost competitive prowess against the likes of Amazon AMZN and Microsoft MSFT in the cloud computing space. The latest collaboration between Google Cloud and Palo Alto Networks combines Google Cloud’s AI and infrastructure capabilities with Prisma AIRS, the latter’s comprehensive AI security platform. Accelerating investments bodes well for GOOGL’s prospects. Alphabet expects capital expenditure between $91 billion and $93 billion for 2025, which is anticipated to increase further in 2026.GOOGL Faces Tough Competition in Cloud DomainPer Synergy Research Group data, Amazon’s share in the worldwide cloud infrastructure market amounted to 29% in the third quarter of 2025, ahead of Microsoft’s Azure platform at 20% and Google Cloud at 13%. Amazon is spending heavily on fortifying its Amazon Web Services (AWS) infrastructure that supports AI workloads and expanded data center capacity. Amazon committed $125 billion in capital expenditure for 2025, with the vast majority directed toward AWS infrastructure. The third quarter alone saw $34.2 billion in cash capex, while the company added 3.8 gigawatts of power capacity over 12 months, the largest expansion in cloud history. In the first quarter of fiscal 2026, Microsoft Azure and other cloud services revenues accelerated 40% in constant currency (cc), with management attributing significant contributions to AI-related demand. Microsoft Cloud revenues reached $49.1 billion, increasing 25% in cc and reflecting strong enterprise adoption of cloud infrastructure and AI capabilities. Spending is expected to accelerate throughout fiscal 2026, with roughly half to be spent on GPUs and CPUs, to support increasing Azure platform demand and AI workload expansion.GOOGL’s Share Price Performance, Valuation & EstimatesAlphabet shares have appreciated 60.5% in the trailing 12 months, outperforming the broader Zacks Computer and Technology sector’s return of 21.6%.GOOGL Stock Outperforms Sector Image Source: Zacks Investment Research The GOOGL stock is trading at a premium, with a forward 12-month price/sales of 9.67X compared with the broader sector’s 6.55X. Alphabet has a Value Score of D.GOOGL Valuation Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for 2025 earnings is pegged at $10.58 per share, unchanged over the past 30 days, suggesting 31.6% growth from fiscal 2024’s reported figure.  Alphabet Inc. Price and Consensus Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote Alphabet currently carries a Zacks Rank #3 (Hold). 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(GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks