US mulls equity stakes in chipmakers receiving CHIPS Act Funds - Reuters
On Tuesday, Cantor Fitzgerald reiterated a Neutral rating on shares of Alphabet (NASDAQ:GOOGL), with analyst Deepak Mathivanan providing insights into the company's cloud business, Google Cloud Platform (GCP). According to InvestingPro data, Alphabet maintains strong financials with revenue of $350 billion and healthy growth of 13.87% year-over-year. The analysis highlighted GCP's impressive growth, exceeding 40% year-over-year (y/y) in the first quarter, mirroring its strong performance from the previous quarter. Looking ahead, expectations are set for GCP to maintain growth in the low-40% range y/y for 2025. With a current P/E ratio of 18.25 and trading near its 52-week low, InvestingPro analysis suggests the stock is currently undervalued, with 12 more exclusive ProTips available for subscribers.
Mathivanan noted that GCP has evolved from its earlier role as a secondary option for non-essential workloads, citing significant advancements in sectors such as Healthcare, Pharma, and Travel. In a notable shift, a major travel client moved their business from Amazon (NASDAQ:AMZN) Web Services (AWS) to GCP, indicating increased competitive positioning for Alphabet's cloud service. The company's strong market position is reflected in its excellent financial health score of 3.2/5 on InvestingPro, with particularly high marks in profitability (4.38/5).
In the realm of artificial intelligence (AI), GCP has seen a successful year with the adoption of Vertex (NASDAQ:VRTX) AI and other customizable General AI tools. These offerings are becoming increasingly attractive to clients seeking robust General AI ecosystems, particularly for marketing and customer service applications. The analyst anticipates further development of AI Agent use-cases in the second half of 2025, although this area is still in the early stages of adoption.
Security has also been a key area of focus for GCP clients. While GCP has made notable strides, including the acquisition of cybersecurity firm Wiz, it is still considered to be trailing behind its main competitors, Azure and AWS, in this domain. Despite these advancements and the positive outlook for GCP's growth, the Neutral rating suggests a cautious stance on Alphabet's stock for the time being.
In other recent news, Wolfe Research has adjusted its outlook on Alphabet Inc. by reducing the price target to $190 while maintaining an Outperform rating. The firm anticipates that Alphabet's first-quarter revenue and earnings per share might align with or fall short of market expectations. Wolfe Research notes that advertising budgets for Search have remained stable, with only a slight decrease. Meanwhile, YouTube continues to perform well, and enterprise Cloud services show steady trends. In other developments, Google has launched Sec-Gemini v1, an experimental AI model aimed at advancing cybersecurity. This model combines advanced reasoning capabilities with near real-time cybersecurity knowledge and is made available for research purposes to selected organizations. Additionally, Japan-based chipmaker Rapidus is in discussions with Apple (NASDAQ:AAPL) and Google for mass-producing advanced semiconductors by 2027. Rapidus has initiated partial operation of a prototype chip line, aiming for full operation soon.
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