"Contrary to ominous predictions after OpenAI launched ChatGPT in late 2022, generative AI has provided a catalyst for Google Search instead of being a "Google killer." Search engine traffic has increased as a result of Google's implementation of genAI integration with AI Overviews and AI Mode. GenAI products such as Imagen4 are also helping customers create more and better online ads."
"Generative AI has also created a massive tailwind for Google Cloud, Alphabet's cloud platform. Google Cloud remains the fastest-growing of the big three cloud service providers. The unit's revenue soared 34% year-over-year to $15.2 billion in Q3. Google Cloud's backlog increased 46% quarter-over-quarter to $155 billion. Alphabet CEO Sundar Pichai mentioned in the Q3 earnings call that Google Cloud signed more deals of over $1 billion in the first nine months of 2025 than it did in the previous two years combined."
"The consensus 12-month price target for the stock reflects a minuscule potential upside. I don't get it. Alphabet has been the most magnificent of the so-called "Magnificent Seven" stocks over the last 12 months. All the ingredients for continued momentum appear to be in place. Should investors believe Wall Street's uninspiring price target for Alphabet? I don't think so. Here are five reasons to buy this high-flying stock like there's no tomorrow."
Alphabet's advertising across Google Search, YouTube, the Google Network, and other products generates more than 72% of total revenue and grew 12.6% year-over-year in Q3 2025. Generative AI integration, including AI Overviews and AI Mode, has increased Search engine traffic and helped create better ads with products like Imagen4. Google Cloud revenue rose 34% year-over-year to $15.2 billion in Q3, with backlog up 46% quarter-over-quarter to $155 billion. Google Cloud signed more $1 billion deals in the first nine months of 2025 than in the prior two years combined. Analysts' consensus 12-month price target shows minimal upside despite these trends.
Read at The Motley Fool
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