Amazon jumps 5% after AWS and OpenAI announce $38B partnership
Investing.com - TD Cowen raised its price target on Alphabet (NASDAQ:GOOG) to $335.00 from $280.00 on Thursday, while maintaining a Buy rating on the stock following the company’s quarterly earnings report. The new target represents potential upside for the tech giant, which currently has a market capitalization of approximately $3.5 trillion and trades at a P/E ratio of 26.14.
The Google parent company reported revenue that beat consensus estimates by 2.4%, with Search, Cloud, and YouTube segments all exceeding expectations by approximately 3%. Operating income came in 2.5% above TD Cowen’s estimate, with margins improving 350 basis points year-over-year, excluding an EC fine. Alphabet’s total revenue reached $371.4 billion in the last twelve months, representing 13.13% year-over-year growth.
Alphabet management specifically credited artificial intelligence for driving growth in both Search and Cloud segments. The company’s Gemini AI platform reached 650 million monthly active users, with queries increasing threefold quarter-over-quarter. InvestingPro analysis shows Alphabet trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of just 0.77, suggesting the market may still be undervaluing its AI-driven growth potential.
TD Cowen noted that Alphabet has again raised its 2025 capital expenditure guidance to approximately $92 billion at the midpoint, up from the previous guidance of $85 billion, suggesting continued investment in AI infrastructure. Despite these massive investments, Alphabet maintains strong financial health, with InvestingPro scoring its overall financial health as "GREAT" with a score of 3.46.
Alphabet stock rose 7% in after-hours trading following the earnings announcement and updated outlook. This continues a strong performance trend, with the stock delivering a 56.91% return over the past year and recently surpassing its previous 52-week high. According to InvestingPro Fair Value assessment, the stock currently appears overvalued. For comprehensive analysis of Alphabet and 1,400+ other US equities, investors can access detailed Pro Research Reports that transform complex Wall Street data into actionable intelligence.
In other recent news, Alphabet has reported impressive financial results for the third quarter of 2025, with earnings per share reaching $2.87, surpassing the forecasted $2.29. The company’s revenue also exceeded expectations, hitting $102.3 billion, compared to the anticipated $99.79 billion. This strong performance has led several research firms to adjust their outlooks on Alphabet’s stock. Oppenheimer raised its price target to $345, citing the acceleration of Alphabet’s Search revenue to 15% year-over-year growth, driven by advancements in artificial intelligence. Wolfe Research also increased its price target to $350, highlighting a 14.5% year-over-year growth in Search revenue and improved paid clicks. Additionally, BMO Capital set a new price target of $340, acknowledging Alphabet’s strong results across its core segments, including Search, YouTube, and Google Cloud. These developments underscore the positive momentum Alphabet is experiencing due to its AI initiatives and robust quarterly performance.
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