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Investing.com - Evercore ISI has reiterated an Outperform rating on Alphabet (NASDAQ:GOOGL) stock with a price target of $205.00 ahead of the company’s second-quarter earnings report, due July 23. According to InvestingPro data, 12 analysts have recently revised their earnings expectations upward for the upcoming period, with the stock currently trading at $185.06.
The research firm expects Alphabet to deliver a "Modest Beat" for Q2 2025, viewing Wall Street’s gross revenue estimate of 10% year-over-year growth and 4% quarter-over-quarter growth as reasonable compared to historical Q2 sequential growth of 5% to 7%. This outlook aligns with Alphabet’s strong track record, as InvestingPro shows the company achieved 13.07% revenue growth in the last twelve months, maintaining its position as a prominent player in the Interactive Media & Services industry.
Evercore’s advertising channel checks throughout the second quarter have been "incrementally positive" with overall budgets increasing year-over-year, despite some fluctuation in April due to tariff headlines and the early Easter shift, while May and June volumes likely stabilized.
The firm considers Street expectations for Cloud Revenue growth of 28% year-over-year and 8% quarter-over-quarter to be reasonable, though it highlighted management’s caution that tight GPU supply could create quarterly volatility until new capacity becomes available in late 2025.
For Q2 operating margin, Evercore views the Street’s forecast of 32.8% (representing 40 basis points expansion year-over-year) as fair, considering product mix and management’s expectations for depreciation to accelerate through fiscal year 2025.
In other recent news, Alphabet has seen a series of analyst upgrades and strategic developments. Morgan Stanley (NYSE:MS) raised its price target for Alphabet to $205, maintaining an Overweight rating, citing Alphabet’s innovation and potential earnings growth. BofA Securities also increased its price target to $210, projecting second-quarter revenue of $81 billion and earnings per share of $2.21, surpassing Street estimates. KeyBanc Capital Markets followed suit, setting a new target of $215, driven by expectations of strong second-quarter results and AI momentum. In legal matters, Alphabet received preliminary court approval for a shareholder lawsuit settlement, with the court requiring the company to notify shareholders about the proposed terms. Meanwhile, Waymo, Alphabet’s self-driving unit, expanded its service area in Austin, Texas, from 37 to 90 square miles, strengthening its position in the competitive self-driving vehicle market. This expansion highlights Waymo’s ongoing efforts to lead in autonomous vehicle technology. These developments reflect Alphabet’s strategic focus on innovation and growth across its various business segments.
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