Following Alphabet’s Q2 2025 earnings report, many investors are re-evaluating their positions in Google stock (GOOGL). With continued strength in core business areas like Search and Cloud, a compelling push into AI and autonomous vehicles, and a reasonable valuation, Google remains a major tech player. But is now the time to buy more shares, hold what you have, or consider trimming your position?
Q2 2025 Earnings Recap
Google's parent company, Alphabet, reported solid numbers for the second quarter of 2025:
- EPS beat by 4.99%
- Revenue beat by 2.54%, with total revenue rising year-over-year
- Cloud revenue jumped over 30% compared to Q2 2024
- Search business remained strong, despite ongoing fears about AI disruption
- Operating margins and net income improved year-over-year
The company also landed a $1.2 billion cloud contract, and its AI developments—such as integrations with Gemini and partnerships like the one where ChatGPT uses Google Search as a fallback—point toward a long-term vision built on infrastructure, search dominance, and new platforms.
Stock Performance & Valuation Metrics
As of late July 2025, Google’s stock is:
- Up 3.69% over the past 5 days
- Up 15.48% over the past year
- Up 156% over the past five years, compared to 98.6% from the S&P 500
Google has shown consistent long-term outperformance with less volatility than many growth stocks like Nvidia. Despite its mature business status, it still delivers growth that beats the broader market.
Key valuation metrics include:
- P/E Ratio: 20.89 — reasonable for a tech stock with consistent earnings and innovation
- PEG Ratio: 1.33 — suggesting fair value when factoring in earnings growth
- EV/EBITDA: Around 16–17 — a healthy range for a profitable tech company
- Dividend: Recently introduced but remains very low, viewed more as a confidence signal than a yield opportunity
Strategic Growth Drivers
Alphabet is not just resting on its laurels. Several areas stand out as future revenue catalysts:
1. Cloud
Google Cloud continues to show strong momentum, becoming an increasingly profitable segment for Alphabet. It grew by more than 30% year-over-year, helped by enterprise contracts like the $1.2 billion deal recently announced.
2. Search & YouTube
Despite AI challengers, Google's search business is still growing. YouTube, too, remains a powerful content and ad platform.
3. AI & Gemini
Alphabet is a key player in AI, with its Gemini model and other AI solutions integrated across Workspace, Android, and Search.
4. Waymo (Autonomous Vehicles)
Alphabet’s autonomous vehicle arm, Waymo, is arguably ahead of Tesla in safety and deployment. It’s already operating in cities like Phoenix, San Francisco, Los Angeles, and expanding to Austin and Atlanta. With a strong safety record and real-world rollout, Waymo could become a major revenue driver as the robo-taxi race heats up.
Sentiment & Analyst Ratings
- Analyst consensus:
- 84% say “Buy”
- 16% say “Hold”
- 0% say “Sell”
- Hedge funds were trimming positions in Q1, but Q2 data may show reversals given the strong report.
- Insider activity is minimal but includes both buys and sells, likely before earnings.
Employee Confidence & Organizational Strength
- Glassdoor rating: 4.3/5
- 85% recommend working there
- 77% CEO approval
These numbers signal a well-run company with strong internal morale—something that often correlates with long-term business performance.
Final Verdict: Hold (for Now)
While Alphabet isn’t the shiny new toy that Nvidia or Tesla might be, it’s a steady, forward-looking company with real profits, reasonable valuation, and growth across multiple industries. That includes AI, cloud computing, search, and potentially autonomous vehicles.
That said, I currently rate Google as a “Hold” in my own portfolio. I own shares, but I’m not rushing to pour more money in at this moment. While its valuation is fair and the fundamentals are strong, the market doesn’t seem overly enthusiastic yet—perhaps due to Alphabet's size and maturity.
What could change that?
- A major Waymo expansion
- A breakthrough with Gemini
- Increased monetization from AI products
- Regulatory clarity around antitrust issues
Google is a stock you can confidently hold, and one with long-term upside if key growth initiatives like Waymo take off. As always, do your own research and consider your personal financial situation before making investment decisions.
