Alphabet's Impressive 2025 Earnings Report
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 02 2026
0mins
Should l Buy GOOGL?
Source: Fool
- Significant Revenue Growth: In 2025, Alphabet reported annual revenue of $403 billion, reflecting a 15% year-over-year increase, with Google Search and YouTube ad revenues rising by 13% and 12% respectively, indicating broad-based growth potential across its business segments.
- Cloud Computing Performance: Google Cloud achieved a remarkable 48% sales growth in Q4 2025, with CEO Sundar Pichai noting that nearly 75% of customers have utilized its optimized AI tools, highlighting strong market demand for AI solutions.
- Surge in Capital Expenditures: Alphabet's capital expenditures reached $91 billion last year, significantly up from $53 billion in 2024, with projections for 2026 to be between $175 billion and $180 billion to support AI-related infrastructure development.
- Optimistic Profit Outlook: Alphabet's earnings per share are projected to grow at a compound annual rate of 12.7% from 2025 to 2028, with a current P/E ratio of 28.5 expected to rise to 30 in five years, showcasing strong investment potential.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 297.390
Low
305.00
Averages
374.25
High
400.00
Current: 297.390
Low
305.00
Averages
374.25
High
400.00
About GOOGL
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.
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- TPU Commercialization Progress: Alphabet's tensor processing units (TPUs) are now monetized through external customers, with agreements in place with companies like Meta and OpenAI, indicating a strengthening competitive edge in the AI infrastructure market and further solidifying its market position.
See More
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- Market Size Forecast: According to McKinsey, global spending on data centers could reach $7 trillion by 2030, indicating a shift in funding sources from hyperscalers to private equity and debt financing, which alters the financial landscape of the industry.
- Insurance Industry Pressure: Gallagher reports that the construction and operation of data centers have posed a 'real stress test' for major insurers over the past four to five years, particularly when investments exceed $20 billion at a single site, challenging the market's insurance capacity.
- Complex Financing Structures: With decreasing transparency in data center financing, Quinn Emanuel's Rana warns that current financing structures could expose downstream investors to second-order litigation risks, especially for pension funds and insurers unaware of concentration risks.
- GPU Lifecycle Issues: CoreWeave recently secured $8.5 billion in GPU-backed loans, yet the average GPU lifecycle of seven years contrasts sharply with the decades-long lifespan of data centers, creating potential risks in financing structures that could destabilize the industry.
See More
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- Surging Oil Prices: The ongoing blockade of the Strait of Hormuz has pushed U.S. crude prices above $114 per barrel on Sunday, highlighting the significant impact of the regional conflict on global energy markets.
- Military Engagement: Iran continues to strike economic and infrastructure targets in neighboring Gulf Arab countries and shot down an American F-15E fighter jet over the weekend, with Trump confirming that the missing service member has been rescued, further escalating tensions.
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See More
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- Investor Windfall: Should SpaceX successfully go public, Elon Musk's net worth could exceed $1 trillion, creating substantial wealth not only for him but also for other investors, particularly companies like Alphabet and Nvidia.
- Alphabet's Potential Gains: Alphabet invested approximately $900 million in SpaceX in 2015, and if SpaceX reaches a $2 trillion valuation, its 7% stake could be worth around $140 billion, greatly enhancing Alphabet's financial position and supporting its $175 billion capital expenditure plan.
- Nvidia's Market Opportunities: Although Nvidia is not a direct investor in SpaceX, as a major customer, the IPO could lead to a significant increase in SpaceX's purchases of Nvidia chips, especially given the growing demand in AI and data center sectors.
See More
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- Rising Capital Costs: With the Federal Reserve maintaining interest rates, AI infrastructure capital expenditures are projected to reach $3 trillion to $4 trillion annually, leading companies to face higher borrowing costs that could impact profitability and investment strategies.
- Market Sentiment Pressure: As expectations for sustained high interest rates increase, valuations of AI stocks may come under pressure, particularly for unprofitable firms like C3.ai and SoundHound AI, which face greater challenges in future earnings projections.
- Shift in Investor Focus: While the Fed's policies have a significant market impact, savvy investors should prioritize the fundamentals of individual companies rather than relying solely on interest rate changes, which will help maintain competitiveness in uncertain market conditions.
- Earnings Expectations Adjustment: Even established AI firms like Nvidia and Alphabet may see their price-to-earnings ratios contract due to market expectations of prolonged high rates, prompting investors to reassess these companies' future profitability in light of potential market fluctuations.
See More
SpaceX Aims for $75 Billion IPO at $2 Trillion Valuation
- Record-Setting IPO: SpaceX is aiming to raise up to $75 billion in its IPO, which, if successful, would become the largest IPO in history, further solidifying its position as one of the most valuable companies globally.
- Investor Windfall: Alphabet's $900 million investment in 2015 for a 7% stake could be worth $140 billion if SpaceX reaches a $2 trillion valuation, significantly enhancing Alphabet's financial outlook.
- Collaboration with Nvidia: As a major customer of Nvidia, SpaceX is expected to increase its chip purchases following the acquisition of xAI, further solidifying Nvidia's dominance in the AI market.
- Future Data Center Plans: Musk intends to use IPO proceeds to establish data centers in space, a concept met with skepticism, but if realized, it could lead to increased demand for Nvidia chips, driving long-term growth.
See More
