When Alphabet agreed to buy fast growing cybersecurity firm Wiz in an all-cash $32 billion deal, investors were left to wonder whether it was a sign of balance sheet strength or growing competitive weakness. The big question for Google stock: will the Wiz purchase boost cloud computing market share versus Amazon.com and Microsoft?
The impact of generative artificial intelligence on the internet search advertising business of Google stock remains top of mind for investors. Even before OpenAI's ChatGPT emerged, though, revenue growth in Google's core internet search advertising business was moderating.
Google Stock: Wiz Marks Biggest Acquisition
What's clear is that Google needs a boost — whether it comes from cloud computing, YouTube or autonomous vehicle firm Waymo. Wall Street analyst reaction to the Wiz purchase was cautious.
"We believe investors will circle back to the larger questions around gen AI return on invested capital, unresolved regulatory issues, and prospects for market share loss in its more important franchise (search)," said UBS analyst Stephen Ju in a report.
At RBC Capital, analyst Brad Erickson said in a report: "We believe this (Wiz) could be looked as Google needing additional horsepower for winning new (cloud) workloads."
"Google's cloud offering is of growing importance to investors and the broader Google growth story," said William Blair analyst Ralph Schackart in a report. "Given this is the company's largest acquisition to date, it is likely that investors will need time to digest such a large acquisition."
While Alphabet paid a high premium for Wiz, Google currently is a cash machine. Google generated $73 billion in free cash flow in 2024 and is expected to churn out $80 billion this year, noted a Jefferies report.
But in 2025, analysts predict Google search advertising growth of nearly 10% to $216.5 billion.
Alphabet may mull more acquisitions, said Truist Securities analyst Youssef Squali in a report.
"Having ended 2024 with $96 billion in cash, we believe it has ample dry powder on its balance sheet to continue investing in organic growth while exploring M&A opportunities in cloud and enterprise software at a time when search advertising is maturing," he said.
Alphabet Stock: DoJ Lawsuits
Google stock has retreated about 11% in 2025. Institutional ownership of GOOGL stock has waned.
Meanwhile, antitrust lawsuits filed by the Department of Justice have pressured Google stock. Both Google's internet search and advertising businesses are under DoJ scrutiny.
Wall Street's hopes that President Donald Trump could take a softer stance in the government's antitrust battle versus Alphabet took a blow when the DoJ again proposed that Google be forced to sell its web browser Chrome.
Federal judge Amit Mehta in August ruled that Alphabet illegally maintained a monopoly over online search services and prevented rivals from developing their own products.
Mehta is expected to hear oral arguments on proposed remedies in April and rule by early August.
Meanwhile, another government antitrust lawsuit versus Google is going forward.
The DOJ claims Google's dominance of the digital ad market has damaged advertisers and content creators. Some analysts call it the "DoubleClick trial." In 2008, Google acquired leading digital advertising firm DoubleClick for $3.1 billion.
Google Stock: OpenAI Competition
Meanwhile, Google stock fell on its Q4 earnings report amid higher-than-expected 2025 capital spending.
Like Alphabet, Amazon and Meta as well as Microsoft plan to continue high capital spending amid fierce competition in artificial intelligence. The emergence of Chinese startup DeepSeek has roiled artificial intelligence stocks.
Also, Google stock has dropped off the IBD Leaderboard. Also, Alphabet's technical ratings have weakened and it continues to under-perform some Magnificent Seven stocks.
Generative AI startup OpenAI's ChatGPT has been slowly gaining search market share. ChatGPT delivers answers to search queries while Google's business model has been based on providing web links. Also, startup Perplexity is another new rival.
Startup OpenAI claims that it now serves 400 million weekly active users, up from 300 million in December 2024, reflecting significant acceleration in adoption. While OpenAI has not disclosed figures for paid consumer subscriptions, its enterprise usage figure has doubled since September 2024, reaching 2 million paying business users.
Google is competing with OpenAI, Facebook-parent Meta and many others in building new foundation models. In December, Google unveiled its new artificial intelligence model, Gemini 2.0.
Google began deploying AI Overviews in the U.S. in mid May, with conversational summaries topping links for many search queries. In late October, Google launched AI Overviews in 100 countries
The AI Overviews system uses Google's in-house Gemini AI model. Advertisers utilizing Gemini AI tools see increased traffic and click-through rates, especially among younger demographics, Google says.
In December, Google announced the Willow quantum computing chip. Google has been a leader in quantum research. But quantum technology faces challenges.
GOOGL Stock: Waymo Expands
Meanwhile, Waymo on Dec. 5 announced that the company plans to expand its autonomous vehicle rideshare service to Miami in 2026. The Waymo One robotaxi service currently operates in Phoenix, San Francisco, and Los Angeles, with upcoming service already planned for Austin, Tex. and Atlanta. In Miami, Waymo will compete with Uber Technologies and other rideshare services. In Austin and Atlanta, Waymo is partnering with Uber.
Meanwhile, Waymo also disclosed that it has reached 150,000 trips per week, rapid growth from August levels at 100,00 per week. Waymo is widely viewed as the leader in autonomous vehicles. In October, Waymo closed a $5.6 billion funding round, including Google and previous investors. If Wall Street analysts start including Waymo in Alphabet's valuation, it would be a big development.
Google Stock: YouTube, TikTok
Also, analysts say GOOGL stock is getting a boost from the Performance Max advertising platform. It automates buying across YouTube, internet search, display, Gmail, maps and other applications. Performance Max lets advertisers manage campaigns across all Google ad inventory.
Aside from Google's core internet search advertising business, Wall Street analysts view growth at YouTube and cloud computing as key. Another question is the performance of Google's hardware business, where it's battling Apple in smartphones.
Google aims to slow down the growth of TikTok with its own short video platform. How much money Google generates from YouTube Shorts is a key issue for 2024, analysts say. YouTube Shorts now generates roughly 70 billion daily views.
In cloud computing, Google is still the third biggest service provider, behind Amazon.com and Microsoft. Like Amazon Web Services and Microsoft' Azure business, Google's cloud unit has upped capital spending targeting the new opportunity in generative AI.
GOOGL Stock: Is It A Buy Or Sell Now?
GOOGL stock popped 37% in 2024, though it pulled back from a high of 201.42 set on Dec. 17.
Whether the internet giant is a buy depends on fundamental and technical factors as well as each investor's own goals, strategy and risk tolerance.
Also, the Relative Strength Rating of Alphabet stock currently stands at only 34 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better.
Google stock holds an Accumulation/Distribution Rating of E. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Further, Alphabet stock holds an IBD Composite Rating of 82 out of a best possible 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Also, as of March 25, GOOGL stock needs to form a new base to be actionable, according to MarketSurge.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
