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Investing.com - UBS raised its price target on Alphabet (NASDAQ:GOOG) to $202.00 from $192.00 while maintaining a Neutral rating following the company’s latest earnings report. According to InvestingPro data, analysts’ targets for the stock range from $185 to $237, with 27 analysts recently revising their earnings expectations upward.
The tech giant delivered what UBS described as "the cleanest print we have seen from Google (NASDAQ:GOOGL) in some time," with Search growth reaching 12% year-over-year, exceeding investor expectations of 10-11%. This growth was driven by paid clicks returning to 4%, in line with 2024 levels and up from 2% in the first quarter of 2025. The company’s overall revenue growth stands at 13.1% year-over-year, with an impressive gross profit margin of 59%.
YouTube revenues reached $9.8 billion, beating the consensus estimate of $9.6 billion, with UBS noting impressive performance details including monetization parity for Shorts and a higher direct response mix.
Google Cloud generated $13.6 billion in revenue, surpassing consensus expectations of $13.1 billion, giving Alphabet "several revenue vectors to drive mid-term growth," according to UBS.
The firm noted that some revenue upside is offset by higher depreciation and amortization expenses from a $10 billion increase to the 2025 capital expenditure guidance, as well as the outlook for typical third-quarter hiring. The company maintains a strong balance sheet with more cash than debt, and its current P/E ratio of 21.3 suggests reasonable valuation relative to its growth prospects.
In other recent news, Alphabet reported earnings that surpassed expectations, with revenue coming in 3% above consensus estimates. The Search and Cloud segments exceeded expectations by 2% and 4%, respectively, while operating income was 6% above consensus, excluding a one-time legal charge. Additionally, Google secured a $1.2 billion cloud-computing deal with ServiceNow (NYSE:NOW), marking a significant achievement for Google Cloud as it competes with major players like Amazon (NASDAQ:AMZN) Web Services and Microsoft (NASDAQ:MSFT) Azure. Analysts at TD Cowen raised Alphabet’s stock price target from $195 to $220, maintaining a Buy rating due to the company’s strong revenue performance. Raymond (NSE:RYMD) James also increased its price target for Alphabet from $185 to $210, citing advancements in AI monetization as a key factor. Google has launched a virtual try-on tool for clothing across its platforms, allowing users to preview apparel before purchasing. Furthermore, Google introduced Aeneas, an AI model aimed at revolutionizing the study of ancient Latin inscriptions, offering enhanced capabilities for historians.
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