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The global financial markets have been sizzling under the intense pressure of President Donald Trump’s tariff hammer, and while some companies, like Apple (AAPL), have taken center stage with its supply chain vulnerabilities, Alphabet’s (GOOGL) Google isn’t safe in this trade war either. While the search engine giant may not be caught in the same supply chain crossfire as the iPhone maker, the ripple effects of tariffs and global retaliation could still pack a punch for Google.
For instance, a global economic slowdown triggered by sustained tariffs could lead companies to swiftly cut back on ad spending, which made up a hefty 76% of Google’s 2024 revenue. That alone could put serious pressure on the tech giant’s growth. But the threats go deeper. Countries are also already rolling out digital service taxes aimed squarely at U.S. tech firms, and more could follow, raising costs for Google abroad. And as geopolitical tensions intensify, international clients may begin to rethink their reliance on American tech, giving local cloud providers a rare window to scale.
Although markets have staged a modest rebound recently, all thanks to a 90-day pause on most reciprocal tariffs, excluding China, with trade tensions still looming large, should one buy or sell GOOGL stock now?
About Google Stock
Valued at approximately $2 trillion by market cap, Alphabet’s (GOOGL) dominance is hard to ignore. The California-based company has grown into a tech empire that stretches far beyond search. From cloud computing and ad-powered streaming to autonomous vehicles and healthcare innovation, Google has its hands in nearly every digital frontier.
But despite Google’s undeniable strengths, the search engine giant hasn’t been immune to the market’s turbulence. Like most of its fellow “Magnificent Seven” peers, GOOGL has also slid into negative territory in 2025, shedding roughly 16.2% so far this year. This drop mirrors the broader market sentiment, with the S&P 500 Index ($SPX) also tumbling around 8.4% on a YTD basis.
Google Tanks After Q4 Earnings
Google’s fourth-quarter earnings report published on Feb. 4 delivered a mix of highs and lows that rattled investors, resulting in a sharp 7.3% drop in its shares in the very next trading session. Despite a solid 11.8% year-over-year revenue jump to $96.5 billion, the figure narrowly missed Wall Street’s $96.7 billion target. But it wasn’t all gloomy. Earnings per share told a brighter story, soaring 31.1% year over year to $2.15 and edging past expectations of $2.12.
Fueling much of Google’s momentum is its powerhouse advertising business, which remains the backbone of its revenue engine. Accounting for a hefty 76% of total sales, the ad segment pulled in $72.5 billion, up a solid 10.6% year-over-year, while Google Search and other revenues jumped 12.5% to $54 billion. But despite the strong performance, investor jitters kicked in, not over the numbers, but over Google’s bold and costly push into artificial intelligence (AI), which cast a shadow over an otherwise solid quarter.
As AI takes center stage in the next wave of tech innovation, Google is going all in. The company plans to pour a staggering $75 billion into capital expenditures for 2025, with $16 billion to $18 billion earmarked for the first quarter alone. The bulk of this spending is aimed at bolstering its AI-ready foundation, expanding servers, data centers, and networking capabilities to power its ambitious vision for the future.
However, this surge in spending came at a time when investor concerns were mounting over the relentless cash burn tied to AI. Earlier this year, Chinese AI startup DeepSeek unveiled a model that claimed to deliver ChatGPT-level performance at just a fraction of the cost. The development has intensified skepticism around whether the billions being poured into AI by tech giants are truly justified.
What Do Analysts Expect for Google Stock?
Wall Street still appears largely bullish on GOOGL stock, maintaining a “Strong Buy” rating overall. Of the 53 analysts offering recommendations, 41 advocate a “Strong Buy,” three give a “Moderate Buy,” and the remaining nine suggest a “Hold.” The average price target of $210.20 represents potential upside of 32%, while the Street-high target of $240 suggests a 52% rally from current levels.
