Key Research Findings for Alphabet, IBM, and Merck
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 16 2025
0mins
Should l Buy GOOG?
Source: NASDAQ.COM
Zacks Research Daily Highlights: The report features research on 16 major stocks, including Alphabet, IBM, and Merck, along with micro-cap stocks SandRidge Energy and NeurAxis, emphasizing unique insights into smaller companies.
Alphabet's Performance: Alphabet's shares have outperformed the industry, driven by growth in Google Cloud and advancements in AI, despite ongoing litigation requiring data sharing with rivals.
IBM's Growth Strategy: IBM is focusing on its Watsonx platform and hybrid cloud solutions, but faces challenges from declining consulting sales and macroeconomic pressures.
Merck's Sales Dynamics: Merck's sales are bolstered by its Keytruda drug, despite facing competitive pressures and challenges in the Chinese market, while also pursuing M&A to enhance its pipeline.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to rise
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 309.370
Low
255.00
Averages
336.08
High
400.00
Current: 309.370
Low
255.00
Averages
336.08
High
400.00
About GOOG
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Alphabet Reasserts AI Leadership Amid Market Challenges
- AI Investment Surge: Alphabet plans to invest between $175 billion and $185 billion in AI by 2026, a significant increase from $91 billion in 2025, demonstrating its commitment to AI and expected to drive future revenue growth.
- Revenue Diversification: While digital ads still account for 73% of revenue, Google Cloud's contribution has risen from 12% to 15%, indicating substantial progress in diversifying revenue sources and enhancing market competitiveness.
- Waymo's Growth Potential: As a leading autonomous driving platform, Waymo has provided 20 million rides to date, and as it expands into new markets, it is expected to become a critical revenue source for Alphabet, further boosting overall profitability.
- Valuation Remains Attractive: Despite recent stock price gains, Alphabet's P/E ratio of 30 closely aligns with the S&P 500 average, suggesting it still holds potential to attract investors and likely achieve market-beating returns over the next five years.
See More
Amazon Stock Presents Strong Buying Opportunity Amidst Short-Term Concerns
- Stock Price Decline: Amazon's stock has dropped approximately 11% year-to-date, with a current P/E ratio of 28, the lowest in a decade, presenting a buying opportunity for investors at a cheaper valuation, with a potential 39% return expected.
- Analyst Consensus: A significant 92% of Wall Street analysts rate Amazon stock as a buy, with a median price target of $285 per share, indicating strong market confidence in its future growth despite the current price of $205.
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2026, primarily for AWS and AI infrastructure, which will likely further deplete free cash flow but is deemed essential for maintaining market leadership.
- AWS Growth Potential: While AWS's net sales grew by 20%, it faces competition from Microsoft and Alphabet; however, its backlog of $244 billion, up 40% year-over-year, indicates strong future earnings potential.
See More
Alphabet's Strong Performance in the AI Market
- Market Share Growth: Alphabet's Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT's 27% share by 2025, demonstrating its competitive edge and market leadership in the AI sector.
- Strong Financial Performance: In 2025, Alphabet generated $402.8 billion in revenue, a 15% increase year-over-year, with operating income nearing $130 billion and an operating margin of 32%, indicating robust profitability amid ongoing growth.
- Capital Expenditure Plans: Alphabet anticipates capital expenditures of $175-$185 billion for 2026, exceeding analyst expectations; however, with $30.7 billion in cash reserves and strong profitability, the company is well-positioned to support its data center expansion.
- Long-Term Debt Financing: Alphabet aims to raise $20 billion through the issuance of 100-year bonds, and despite its long-term debt of $46.5 billion, the company's diversified revenue streams and strong cash flow provide a solid financial foundation for taking on additional debt.
See More
Barrier Capital Initiates Over $10 Million Position in Compass
- New Investment Move: Barrier Capital Management disclosed in an SEC filing dated February 13, 2026, that it initiated a new position in Compass (NYSE:COMP) by purchasing 952,074 shares valued at $10.06 million, indicating a strong bullish outlook on the company.
- Asset Allocation Shift: This transaction positions Compass as the sixth largest holding for Barrier Capital, representing 7.4% of its reportable assets under management, reflecting confidence in Compass's future growth potential.
- Strong Performance: Compass achieved record revenue of $1.9 billion in Q3 2026, marking a 24% year-over-year growth, and forecasts sales to reach between $1.6 billion and $1.7 billion in Q4, further solidifying its market position.
- Attractive Valuation: With a price-to-sales ratio of 0.9 and a solid balance sheet, Compass is viewed as a good investment opportunity despite not being included in Motley Fool's top stock picks, highlighting the potential for significant returns.
See More
Alphabet's AI Investment and Financial Outlook
- Significant Revenue Growth: Alphabet's revenue reached $402.8 billion in 2025, marking a 15% increase, indicating a robust financial position supported by diversified revenue streams that can sustain future investments.
- Capital Expenditure Plans: Anticipated capital expenditures for 2026 are projected to be between $175 billion and $185 billion, exceeding analyst expectations; despite the high costs of building data centers, Alphabet's cash reserves grew by 30% to $30.7 billion, showcasing its financial strength.
- AI Market Share Increase: Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT, reflecting Alphabet's growing competitiveness in the AI sector, which could lead to higher revenue streams.
- Long-term Debt Financing: Alphabet plans to raise $20 billion through the issuance of 100-year bonds; while its long-term debt stands at $46.5 billion, its strong profitability and diversified revenue sources enable effective debt risk management.
See More
Quantum Computing Inc. Faces Significant Financial Risks
- Revenue vs. Market Cap: Quantum Computing Inc. generated only approximately $546,000 in revenue over the past 12 months, while its market capitalization stands at $1.87 billion, indicating a severe disconnect that could undermine investor confidence.
- High R&D Spending: The company spends tens of millions annually on development, and while it has $555 million in cash reserves, the ongoing high expenditures could erode financial stability and impact future growth prospects.
- Equity Dilution Risk: Over the past year, the company issued more than $840 million in additional common stock to fill funding gaps, which raises concerns about significant shareholder dilution and the market's perception of its future financing capabilities.
- Management Trust Issues: The management frequently makes exaggerated claims that lack substantial backing, leading to skepticism about the sustainability of its contracts, primarily consisting of one-off research grants, which further heightens investor concerns about future performance.
See More
Alphabet Reasserts AI Leadership Amid Market Challenges
- AI Investment Surge: Alphabet plans to invest between $175 billion and $185 billion in AI by 2026, a significant increase from $91 billion in 2025, demonstrating its commitment to AI and expected to drive future revenue growth.
- Revenue Diversification: While digital ads still account for 73% of revenue, Google Cloud's contribution has risen from 12% to 15%, indicating substantial progress in diversifying revenue sources and enhancing market competitiveness.
- Waymo's Growth Potential: As a leading autonomous driving platform, Waymo has provided 20 million rides to date, and as it expands into new markets, it is expected to become a critical revenue source for Alphabet, further boosting overall profitability.
- Valuation Remains Attractive: Despite recent stock price gains, Alphabet's P/E ratio of 30 closely aligns with the S&P 500 average, suggesting it still holds potential to attract investors and likely achieve market-beating returns over the next five years.
See More
Amazon Stock Presents Strong Buying Opportunity Amidst Short-Term Concerns
- Stock Price Decline: Amazon's stock has dropped approximately 11% year-to-date, with a current P/E ratio of 28, the lowest in a decade, presenting a buying opportunity for investors at a cheaper valuation, with a potential 39% return expected.
- Analyst Consensus: A significant 92% of Wall Street analysts rate Amazon stock as a buy, with a median price target of $285 per share, indicating strong market confidence in its future growth despite the current price of $205.
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2026, primarily for AWS and AI infrastructure, which will likely further deplete free cash flow but is deemed essential for maintaining market leadership.
- AWS Growth Potential: While AWS's net sales grew by 20%, it faces competition from Microsoft and Alphabet; however, its backlog of $244 billion, up 40% year-over-year, indicates strong future earnings potential.
See More
Alphabet's Strong Performance in the AI Market
- Market Share Growth: Alphabet's Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT's 27% share by 2025, demonstrating its competitive edge and market leadership in the AI sector.
- Strong Financial Performance: In 2025, Alphabet generated $402.8 billion in revenue, a 15% increase year-over-year, with operating income nearing $130 billion and an operating margin of 32%, indicating robust profitability amid ongoing growth.
- Capital Expenditure Plans: Alphabet anticipates capital expenditures of $175-$185 billion for 2026, exceeding analyst expectations; however, with $30.7 billion in cash reserves and strong profitability, the company is well-positioned to support its data center expansion.
- Long-Term Debt Financing: Alphabet aims to raise $20 billion through the issuance of 100-year bonds, and despite its long-term debt of $46.5 billion, the company's diversified revenue streams and strong cash flow provide a solid financial foundation for taking on additional debt.
See More
Barrier Capital Initiates Over $10 Million Position in Compass
- New Investment Move: Barrier Capital Management disclosed in an SEC filing dated February 13, 2026, that it initiated a new position in Compass (NYSE:COMP) by purchasing 952,074 shares valued at $10.06 million, indicating a strong bullish outlook on the company.
- Asset Allocation Shift: This transaction positions Compass as the sixth largest holding for Barrier Capital, representing 7.4% of its reportable assets under management, reflecting confidence in Compass's future growth potential.
- Strong Performance: Compass achieved record revenue of $1.9 billion in Q3 2026, marking a 24% year-over-year growth, and forecasts sales to reach between $1.6 billion and $1.7 billion in Q4, further solidifying its market position.
- Attractive Valuation: With a price-to-sales ratio of 0.9 and a solid balance sheet, Compass is viewed as a good investment opportunity despite not being included in Motley Fool's top stock picks, highlighting the potential for significant returns.
See More
Alphabet's AI Investment and Financial Outlook
- Significant Revenue Growth: Alphabet's revenue reached $402.8 billion in 2025, marking a 15% increase, indicating a robust financial position supported by diversified revenue streams that can sustain future investments.
- Capital Expenditure Plans: Anticipated capital expenditures for 2026 are projected to be between $175 billion and $185 billion, exceeding analyst expectations; despite the high costs of building data centers, Alphabet's cash reserves grew by 30% to $30.7 billion, showcasing its financial strength.
- AI Market Share Increase: Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT, reflecting Alphabet's growing competitiveness in the AI sector, which could lead to higher revenue streams.
- Long-term Debt Financing: Alphabet plans to raise $20 billion through the issuance of 100-year bonds; while its long-term debt stands at $46.5 billion, its strong profitability and diversified revenue sources enable effective debt risk management.
See More
Quantum Computing Inc. Faces Significant Financial Risks
- Revenue vs. Market Cap: Quantum Computing Inc. generated only approximately $546,000 in revenue over the past 12 months, while its market capitalization stands at $1.87 billion, indicating a severe disconnect that could undermine investor confidence.
- High R&D Spending: The company spends tens of millions annually on development, and while it has $555 million in cash reserves, the ongoing high expenditures could erode financial stability and impact future growth prospects.
- Equity Dilution Risk: Over the past year, the company issued more than $840 million in additional common stock to fill funding gaps, which raises concerns about significant shareholder dilution and the market's perception of its future financing capabilities.
- Management Trust Issues: The management frequently makes exaggerated claims that lack substantial backing, leading to skepticism about the sustainability of its contracts, primarily consisting of one-off research grants, which further heightens investor concerns about future performance.
See More
