Alphabet’s report shifts the outlook – the share price may test resistance at 200 USD

Strong results from Alphabet for Q1 2025 and a 70 billion USD share buyback could reinforce the bullish case for GOOG stock.

Alphabet Inc. (NASDAQ: GOOG)’s report for Q1 2025 significantly exceeded Wall Street expectations. Revenue rose 12% year-on-year to 90.23 billion USD, while net profit increased by 46% to 34.54 billion USD. The main growth drivers were the Google Cloud division, which saw a 28% rise in revenue, and the successful monetisation of AI tools like Gemini 2.5. In addition, the company announced a 70 billion USD share buyback and raised its dividend. Alphabet’s shares surged following the report’s release. This market reaction reflects optimism surrounding the rapid commercialisation of AI, improved profitability in the cloud business, and a shareholder-friendly policy.

This article examines Alphabet Inc., outlines its key revenue streams, and reviews its 2024 performance. It also offers a technical analysis of GOOG stock, serving as the basis for the Alphabet stock forecast for 2025.

About Alphabet Inc.

Alphabet Inc. was established on 2 October 2015 through a restructuring of Google, which had been founded by Lawrence Page and Sergey Brin in 1998. Google was originally a search engine but gradually evolved into a diversified technology company, covering advertising, cloud services, mobile platforms, and other areas.

By 2015, Google’s scope and diversification had made its management increasingly complex. As a result, a holding structure – Alphabet Inc. – was set up, with Google becoming one of its divisions focusing on core businesses (Search, YouTube, and Android). At the same time, innovative projects, such as Waymo and Verily, were spun off into separate companies under Alphabet’s management.

Since the restructuring, Alphabet has replaced Google as the listed public company on the stock exchange, retaining its existing tickers (GOOGL and GOOG). Larry Page became Alphabet’s CEO, Sergey Brin its President, and Pichai Sundararajan was appointed CEO of Google.

Alphabet is listed on the stock exchange under two tickers, GOOGL and GOOG:

• GOOGL (Class A) – voting shares. Holders of these shares are entitled to vote at shareholder meetings (1 share = 1 vote)
• GOOG (Class C) – non-voting shares. These shares provide the same economic rights (dividends, capital appreciation) but do not allow holders to participate in the company’s management.

Alphabet Inc.’s main revenue streams

Alphabet Inc., the parent company of Google and other subsidiaries, generates revenue from several business segments. The primary sources of revenue are outlined below:

• Google services: the largest source of income, driven primarily by advertising. This includes:
  • Google Search and others: revenue from advertisements placed on Google Search, Gmail, Google Maps, and other Google-owned services
  • YouTube ads: revenue from banner ads, skippable and non-skippable video ads, and overlay ads on YouTube
  • Subscriptions, platforms, and devices: revenue from subscription services such as YouTube Premium, YouTube TV, Google One, and NFL Sunday Ticket. This category also includes app sales, in-game purchases via the Google Play Store, and sales of hardware such as Pixel phones, Nest and Chromecast devices

• Google Cloud: revenue from cloud computing services, including infrastructure, platform solutions, and apps such as Google Workspace and Gemini for Cloud. Google Cloud serves corporate clients and is growing rapidly, although it still lags behind competitors such as AWS and Microsoft Azure

• Other Bets: includes Alphabet’s ambitious ventures, such as Waymo (autonomous driving), Verily (healthcare), and GFiber (internet services), with most revenue coming from the latter two. Although this segment contributes less to overall revenue, it focuses on long-term innovation and often operates at a loss
• Alphabet operations: this includes small currency-related hedging revenue and other corporate activities. This is not the primary segment but includes other income unrelated to the core segments

Advertising remains the basis for Alphabet’s revenue, with Google services, notably Search and YouTube, taking the lead. Google Cloud is a growing revenue stream, reflecting Alphabet’s commitment to developing solutions for companies, while other projects are speculative investments with a limited but increasing impact on revenues.

Alphabet Inc.’s financial position

Alphabet Inc. is in a strong financial position, reflecting both stability and strategic momentum. The company continues to deliver steady revenue growth, driven primarily by its advertising operations, particularly via Google Search and YouTube.

Alphabet closed 2024 with a revenue of 350 billion USD, a 14% increase year-on-year. Net income rose by 28% to 100 billion USD.

Google Services, which includes Search, YouTube, and other platforms, generated 84.1 billion USD in revenue in 2024, up 10% from 2023. The Google Cloud segment also expanded, reaching 12 billion USD, which is also a 10% increase from the previous year.

Alphabet plans to invest around 75 billion USD in 2025, significantly higher than the 52 billion USD in 2024. The primary objective is to expand its AI infrastructure and capabilities. CEO Sundar Pichai emphasised the importance of AI across all the company’s products.

Alphabet Inc. financial results for Q1 2025

On 24 April, Alphabet published its report for Q1 2025, which ended on 31 March. The key figures are presented below, compared to the same period in 2024:

• Revenue: 90.2 billion USD (+12%)
• Net income: 34.5 billion USD (+46%)
• Earnings per share: 2.81 USD (+49%)
• Costs and expenses: 59.6 billion USD (+8%)
• Operating income: 30.6 billion USD (+20%)
• Operating margin: 34% (+200 basis points)

Revenue by segment:

• Google Services: 77.3 billion USD (+10%)
• Google advertising: 66.9 billion USD (+8%)
  • Google Search & other: 50.7 billion USD (+10%)
  • YouTube ads: 8.9 billion USD (+10%)
  • Google Network: 7.3 billion USD (–2%)
  • Google subscriptions, platforms, and devices: 10.4 billion USD (+19%)

• Google Cloud: 12.3 billion USD (+28%)

• Other Bets: 0.4 billion USD (–10%)

Alphabet’s Q1 2025 report demonstrates resilient growth, making the company’s shares attractive to investors. Revenue rose by 12% year-on-year, driven by strong performance in search, YouTube, and Google Cloud, while net income increased by 46%.

The search segment remains the primary source of revenue, with the rollout of AI Overviews reaching 1.5 billion monthly users, boosting engagement without undermining monetisation. YouTube continues to lead in the streaming segment, while the subscriber base has grown to 270 million (across YouTube and Google One), contributing to a steady stream of high-margin revenue. Google Cloud posted 28% revenue growth and a margin of 17.8%, reinforcing the company’s strategic focus on AI infrastructure. The planned acquisition of Wiz for 32 billion USD, expected to close in 2026, will strengthen Alphabet’s cloud security position and enhance its competitiveness in the market.

Alphabet announced a 70 billion USD share buyback and a 5% increase in quarterly dividends, now at 0.21 USD per share, reflecting confidence in its outlook.

Although the company did not provide specific guidance for Q2 2025, the consensus forecast expects revenue of 93.6 billion USD and earnings per share of 2.14 USD, pointing to continued stable growth.

CFO Anat Ashkenazi noted the risks associated with tariffs, particularly for the advertising business in the Asia-Pacific region, but confirmed that Q1 2025 capital expenditures (17.2 billion USD) are in line with the full-year plan. The company’s ongoing focus on innovation in search, expansion of its cloud business, and development of autonomous transport through Waymo (which now covers over 500 square miles) provides multiple growth drivers.

Alphabet’s strong quarterly performance highlights its ability to adapt and grow despite intense competition. Its leadership in AI, expansion of the cloud segment, share buyback program, and dividends make the company’s stock attractive to investors focused on future-facing technologies.

Expert forecasts for Alphabet Inc. stock

• Barchart: 41 out of 53 analysts rated Alphabet stock as a Strong Buy, three as a Moderate Buy, and nine as a Hold. The highest target price is 240 USD, and the lowest is 160 USD
• MarketBeat: 17 out of 25 experts gave the stock a Buy rating, six recommended Hold, and two advised Sell. The maximum target price is 235 USD, while the lowest is 171 USD
• TipRanks: 16 out of 17 analysts rated the stock as Buy, with one recommending Hold. The highest target price is 234 USD, and the lowest is 173 USD
• Stock Analysis: 17 out of 43 experts rated the shares as a Strong Buy, 16 as Buy, and 10 as Hold. The highest target price is 230 USD, and the lowest is 159 USD

Alphabet Inc. stock price forecast for 2025

On the weekly timeframe, Alphabet shares are trading within an upward channel. In February 2025, the price bounced off the upper boundary of the channel and turned downwards, indicating a correction that may end upon reaching the trendline. However, the release of strong Q1 2025 financial results and the positive investor reaction could drive GOOG shares higher from current levels. In this case, the correction may end prematurely without reaching the lower trendline. Based on Alphabet Inc.’s recent performance, the potential scenarios for the stock’s movement in 2025 are as follows:

The base-case forecast for Alphabet shares anticipates a rise to the resistance level at 188 USD. A breakout above this level would trigger further growth, potentially pushing the GOOG share price up to 200 USD.

The alternative forecast for Alphabet stock envisions a renewed test of support at 150 USD, followed by a breakout and a decline towards the trendline around 125 USD. A rebound from the trendline would signal the end of the correction and the beginning of a new upward wave in Alphabet’s share price.