Alphabet Inc. (GOOG) stock is holding steady ahead of the company’s second-quarter 2025 earnings report, due after markets close Wednesday. Investors are watching closely as the Google parent company leans heavily into artificial intelligence, navigates ongoing regulatory pressure, and ramps up autonomous vehicle efforts via Waymo.
Q2 expectations: Strong growth, but rising scrutiny
Analysts expect Alphabet to report:
- EPS: $2.20 (up from $1.89 YoY)
- Revenue: $93.98 billion (up 10.9% YoY)
Recent momentum has prompted KeyBanc to raise its price target to $215. They are citing strength in Search, YouTube, and Cloud, plus optimism about AI-driven efficiencies. Alphabet’s market cap stands near $1.87 trillion. It has a P/E ratio of 16.89, positioning the stock as a relative value in Big Tech.
The company’s stock is up 0.78% year-to-date, underperforming broader indices, but showing strong recent gains — over 15% in the past month.
Key growth drivers: Gemini AI and Waymo
Alphabet’s Gemini 2.5 Pro AI model is being integrated directly into Google Search, aimed at boosting engagement amid intensifying competition from OpenAI’s ChatGPT and other generative models.
Meanwhile, Waymo, the company’s autonomous driving unit, is reportedly providing over 250,000 paid autonomous rides per week — a critical milestone as Alphabet seeks to diversify revenue beyond advertising.
“Alphabet is a long-term tech powerhouse with exposure to search, AI, cloud, and autonomous vehicles — all massive addressable markets,” wrote one analyst ahead of earnings.
Regulatory risks loom large
Despite the bullish growth outlook, Alphabet faces increasing regulatory scrutiny. A recent U.S. court ruling found that Google had abused its search dominance, which could lead to forced divestitures or changes to its core algorithms.
The company is also dealing with rising AI development costs and unproven monetization strategies. Critics warn that the “AI arms race” may yield diminishing returns as costs soar with each new upgrade.
Is Alphabet stock a long-term buy?
Some analysts — including Motley Fool contributor Anders Bylund — continue to describe Alphabet as the top long-term tech buy for individual investors. Citing its blend of innovation, resilience, and affordability, Bylund believes Alphabet could double and still appear undervalued next to peers like Netflix and Nvidia.
“Alphabet hits every checkbox for a long-term investor: robust fundamentals, visionary leadership, and unmatched reach,” Bylund said.
Alphabet’s diverse revenue streams — from YouTube and Android to Google Cloud and AI services — give it the flexibility to adapt and thrive across economic cycles.
What happens next?
With Q2 earnings on deck, Alphabet’s after-hours performance could be driven less by headline numbers and more by forward-looking commentary. Key areas to watch:
- AI revenue strategy and operating costs
- Update on the Gemini AI rollout
- Waymo expansion plans
- Regulatory responses and legal risk outlook
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