Positive news on autonomous vehicle builder Waymo and the long-range prospects for quantum computing have buoyed Google-parent Alphabet. But the core internet search business is still top of mind for Google stock amid the rise of generative artificial intelligence.
Also, ongoing antitrust lawsuits pursued by the Department of Justice hang over GOOGL stock.
Fourth quarter and full year earnings for Alphabet stock are due Feb. 4. Wall Street analysts project EPS growth of 29% to $2.12 with revenue growing 12% to $96.7 billion.
Also, Google's internet search advertising is expected to climb 11% to $53.29 billion, according to analysts polled by FactSet. YouTube ad revenue will grow 11% to $10.24 billion, analysts predict. Meanwhile, cloud computing revenue is expected to grow 32% to $12.1 billion.
Alphabet's new Chief Financial Officer, Anat Ashkenazi, is expected to lay out more of her priorities on the Q4 earnings call with analysts.
Meta Platform's Q4 results may bode well for Alphabet stock, said Bank of America analyst Justin Post in a report.
"We see Meta's Q4 ad revenue beat and e-commerce vertical commentary as positive read across for Google Q4 results," he said in a report. "A channel check also indicated AI overview ads aided search pricing. We recently lowered our estimates for recent U.S. dollar appreciation, but with Meta not seeing a Q4 currency exchange rate impact and e-commerce ad spend strength, we think Google can beat street Q4 estimates."
Google Stock: Innovation Leader
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, Google stock belongs to the IBD Leaderboard. But Alphabet continues to under-perform some Magnificent Seven stocks.
GOOGL stock popped 37% in 2024, though it pulled back from a high of 201.42 set on Dec. 17. So far in 2025, GOOGL stock has advanced 8%.
In 2025, analysts predict Google search advertising growth of nearly 10% to $216.5 billion.
Alphabet CEO Sundar Pichai said over 25% of new Google code is generated by artificial intelligence. Google's increasing reliance on AI tools for software development begs the question of whether workforce reductions will follow.
Google Stock: Search Business Threatened
Generative AI startup OpenAI's ChatGPT continues to slowly gain 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. Perplexity is seeking a merger with TikTok.
Google is competing with OpenAI, Facebook-parent Meta Platforms 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.
However, legal woes continue amid DoJ antitrust cases. Both Google's internet search and advertising businesses are under DoJ scrutiny.
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.
Google's 2022 acquisition of cybersecurity firm Mandiant for $5.4 billion seems to be paying dividends. Mandiant is part of Google's cloud-based cybersecurity services.
GOOGL Stock: Is It A Buy Or Sell Now?
Alphabet stock has turned in good and bad years recently. Shares jumped 65% in 2021 but in 2022 dropped 39%. Despite mounting competition in AI and internet search, Alphabet advanced 58% in 2023.
Also, the Relative Strength Rating of Google stock currently stands at 85 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 B. 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, shares hold an IBD Composite Rating of 98 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.
On MarketSurge, GOOGL stock trades above a buy zone. And, long-time holders could take profits.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
