Google Stock (GOOL) Aims for Record Highs After $200 Break, as Outlook Improves
Alphabet’s robust Q2 performance lifted optimism for future earnings, but an unexpected jump in capital spending tempered investor...
Quick overview
- Alphabet's Q2 performance exceeded expectations, leading to a 12% stock recovery and renewed investor interest.
- Revenue for Q2 reached $81.2 billion, with adjusted EPS at $2.31, both surpassing estimates.
- Despite strong results, shares fell over 2% after a surprise increase in 2025 capital expenditure guidance from $75 billion to $85 billion.
- The outlook remains positive, with analysts projecting significant earnings growth for the upcoming quarters.
Live GOOGL Chart
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Alphabet’s robust Q2 performance lifted optimism for future earnings, but an unexpected jump in capital spending tempered investor enthusiasm.
Q2 Strength Fuels Stock Recovery
Alphabet Inc. (NASDAQ: GOOGL) delivered a solid second-quarter report, surpassing Wall Street’s expectations across advertising, search, YouTube, and Google Cloud. Over the past month, the stock has recovered roughly 12%, as upbeat projections for Q3 and beyond reignited buying interest. Technical support levels held firm, allowing GOOGL to break above $200 yesterday, with the next target in sight being the record high of $206.38.
GOOGL Chart Daily – The 20 SMA Held As Support
For Q2, revenue excluding traffic acquisition costs reached $81.2 billion, while adjusted EPS came in at $2.31—both comfortably ahead of estimates. YouTube ad revenue climbed 13% year-over-year to $9.8 billion, slightly topping projections. Google Cloud revenue surged to $13.6 billion, once again beating forecasts, driven by strong enterprise demand for AI and infrastructure services.
GOOGL Chart Monthly – New All Time Highs Soon
Earnings Outlook Remains Upbeat
For the current quarter, analysts expect earnings of $2.37 per share, up 11.8% year-over-year, with the consensus estimate improving by 8.6% in the past 30 days. Full-year fiscal 2025 EPS is now projected at $10.12, representing a 25.9% annual increase, while the consensus for fiscal 2026 stands at $10.76, up 6.3% from the prior year. These figures have also seen steady upward revisions over the past month, reflecting confidence in Alphabet’s growth trajectory.
Capex Shock Tempers Enthusiasm
Despite the strong results, Alphabet’s shares slipped more than 2% in after-hours trading to below $186 after management raised its 2025 capital expenditure guidance from $75 billion to $85 billion. The larger-than-expected spending plan caught investors off guard, signaling an aggressive push to scale infrastructure for AI and cloud growth. While the strategy underlines long-term confidence, it also raises short-term concerns about margins and free cash flow.
Outlook: Alphabet’s Q2 results reinforced its dominance in digital advertising and cloud services while showcasing the potential of growth. However, the sharp increase in planned capital spending highlights the delicate balance between seizing growth opportunities and maintaining profitability. With the stock now eyeing all-time highs, upcoming quarters will be critical in determining whether GOOGL can sustain its upward momentum while absorbing the impact of its ambitious investment plans.
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