Why Alphabet (GOOG) Stock Is Poised to Explode: AI Surge & $85B Capital Push Fueling the Rise

What’s Driving Alphabet (GOOG) Stock Momentum?

Alphabet, doing business as Google (“GOOG”), posted stellar Q2 2025 earnings, with $96.4 billion in revenue and $2.31 EPS, beating expectations significantly.

Strategic Growth via Massive AI & Cloud Investments

Alphabet raised its 2025 capital expenditure target to $85 billion to accelerate AI/Cloud infrastructure expansion. Though investors initially balked at the higher CapEx spend, confidence rebounded as usage gains for AI features became clear:

• 2 billion users for AI Overviews

• 450 million monthly users for Gemini AI

• 100 million using AI Mode in search across the U.S. and India.

Wall Street Still Watches AI Headwinds & Regulatory Risk

Not all sentiment is bullish. Some investors worry AI-powered rivals like ChatGPT and Claude may undermine Google’s search dominance and ad revenue model.
Key concerns include pending antitrust rulings that could force changes to search agreements or business structure – although Alphabet’s diversified assets continue to offer upside.

Stock Price Trends & Trader Sentiment

• Stock rose ~3% in recent sessions thanks to optimism around AI spend and earnings strength, contrasted with broader market weakness (e.g., Tesla).

• Despite strong performance, YTD gains are tepid at ~7%, with a ~13% drop over the past 3 months.

• Forward P/E ratio sits near 17.7, below the average of 44 among peers, which may suggest the stock is undervalued amid lingering investor caution.

Your Queries Solved...............

Q2 2025 Earnings: AI, Cloud & Revenue Beat

Massive $85B CapEx Lift: Why Bold Spending Might Pay Off

Alphabet Inc