Alphabet (NASDAQ:GOOGL) Trading Up 6.7% - Time to Buy?

Key Points

• Alphabet shares jumped 6.7% to $356.13 on unusually heavy trading volume after the company reported quarterly revenue of $119.8 billion and earnings of $9.11 per share, both above expectations.
• Investors are encouraged by strong Google Cloud growth, AI demand, custom TPU chips, and expanded partnerships with Oracle and Anthropic. Analysts maintain a “Buy” consensus with an average price target of $419.86.
• Key risks include plans to spend up to $205 billion on 2026 capital expenditures, which could pressure cash flow and margins, along with legal investigations and concerns that AI Overviews may reduce advertising referral traffic.

Alphabet Inc. (NASDAQ:GOOGL - Get Free Report) shares shot up 6.7% on Friday . The stock traded as high as $358.58 and last traded at $356.13. 46,242,734 shares changed hands during trading, an increase of 43% from the average daily volume of 32,444,031 shares. The stock had previously closed at $333.66.

Trending Headlines about Alphabet

Here are the key news stories impacting Alphabet this week:

• Positive Sentiment: Alphabet’s custom Tensor Processing Units (TPUs) are increasingly viewed as credible alternatives to Nvidia chips. The potential to use them internally and generate external revenue could improve AI capacity, reduce dependence on Nvidia and create a new business opportunity. Alphabet and Amazon custom AI chips
• Positive Sentiment: Investors continued to reassess Alphabet’s earnings strength. The company reported $119.8 billion in quarterly revenue and $9.11 in earnings per share, far exceeding estimates, while Google Cloud growth and the AI backlog supported expectations for continued expansion. Analysts’ average price target is approximately $419.86, with the stock still viewed as relatively inexpensive among major AI companies. Alphabet AI investment and valuation
• Positive Sentiment: Google’s expanded partnership with Oracle will bring Gemini models to Oracle’s enterprise applications, potentially broadening distribution and increasing Google Cloud adoption. Google is also supporting a proposed Anthropic data center with chips and financial guarantees, reinforcing its role in AI infrastructure. Alphabet Oracle Gemini partnership
• Neutral Sentiment: Alphabet’s AI strategy is attracting long-term investors, including Berkshire Hathaway, but the broader AI investment theme remains highly competitive. Strong results from Microsoft also confirmed robust cloud demand while highlighting the intensity of the spending race. Berkshire Hathaway and Alphabet
• Negative Sentiment: Alphabet plans to spend as much as $205 billion on capital expenditures in 2026, largely for servers and AI infrastructure. Investors remain concerned that negative cash flow, higher memory costs and future depreciation could pressure margins before AI returns fully materialize. Alphabet capital spending
• Negative Sentiment: Legal investigations into possible securities-law violations and criticism that AI Overviews are reducing referral traffic add risk to Google’s advertising ecosystem. Recent director and executive stock sales are a minor additional sentiment headwind, though the transactions were small relative to their remaining holdings. Alphabet investor investigation

Wall Street Analysts Forecast Growth

Several research firms have weighed in on GOOGL. Dbs Bank lifted their target price on Alphabet from $400.00 to $460.00 in a research note on Thursday, May 7th. Sanford C. Bernstein reaffirmed a "market perform" rating and set a $390.00 price objective (up from $345.00) on shares of Alphabet in a research report on Thursday, April 30th. Canaccord Genuity Group upped their price objective on shares of Alphabet from $415.00 to $450.00 and gave the company a "buy" rating in a research note on Thursday, April 30th. DZ Bank raised shares of Alphabet to a "strong-buy" rating in a research note on Thursday, July 23rd. Finally, China Renaissance upped their target price on Alphabet from $400.00 to $485.00 and gave the stock a "buy" rating in a research report on Monday, May 4th. Six investment analysts have rated the stock with a Strong Buy rating, forty-four have given a Buy rating and four have issued a Hold rating to the company. According to MarketBeat.com, Alphabet presently has an average rating of "Buy" and an average target price of $419.86.

Alphabet Stock Performance

The firm has a fifty day moving average of $358.32 and a 200-day moving average of $339.18. The company has a quick ratio of 2.64, a current ratio of 2.72 and a debt-to-equity ratio of 0.16. The firm has a market cap of $4.31 trillion, a P/E ratio of 17.89, a PEG ratio of 0.94 and a beta of 1.24.

Alphabet (NASDAQ:GOOGL - Get Free Report) last announced its quarterly earnings data on Wednesday, July 22nd. The information services provider reported $9.11 earnings per share for the quarter, topping the consensus estimate of $2.89 by $6.22. Alphabet had a return on equity of 51.32% and a net margin of 54.77%.The firm had revenue of $119.80 billion during the quarter, compared to analysts' expectations of $117.07 billion. Research analysts predict that Alphabet Inc. will post 20.52 earnings per share for the current fiscal year.

Alphabet Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Monday, September 14th. Investors of record on Monday, September 7th will be given a $0.22 dividend. This represents a $0.88 dividend on an annualized basis and a dividend yield of 0.2%. The ex-dividend date is Friday, September 4th. Alphabet's dividend payout ratio (DPR) is currently 4.42%.

Insider Buying and Selling

In related news, Director John L. Hennessy sold 1,050 shares of the business's stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $368.63, for a total transaction of $387,061.50. Following the completion of the transaction, the director owned 1,481 shares in the company, valued at approximately $545,941.03. The trade was a 41.49% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, major shareholder 2019 Gp L.L.C. Gv sold 196,931 shares of the company's stock in a transaction that occurred on Monday, July 27th. The shares were sold at an average price of $19.46, for a total transaction of $3,832,277.26. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 600,547 shares of company stock valued at $16,255,540 in the last 90 days. 11.61% of the stock is owned by insiders.

Institutional Trading of Alphabet

Large investors have recently made changes to their positions in the company. Vanguard Group Inc. raised its stake in shares of Alphabet by 2.4% during the 4th quarter. Vanguard Group Inc. now owns 528,969,322 shares of the information services provider's stock worth $165,567,398,000 after purchasing an additional 12,531,695 shares during the period. State Street Corp grew its position in Alphabet by 1.8% during the second quarter. State Street Corp now owns 229,954,269 shares of the information services provider's stock valued at $40,524,841,000 after buying an additional 4,008,374 shares during the period. Geode Capital Management LLC grew its position in Alphabet by 1.9% during the fourth quarter. Geode Capital Management LLC now owns 146,193,037 shares of the information services provider's stock valued at $45,625,595,000 after buying an additional 2,666,676 shares during the period. Norges Bank purchased a new stake in Alphabet during the fourth quarter worth about $30,534,239,000. Finally, Bank of America Corp DE raised its position in Alphabet by 4.9% in the fourth quarter. Bank of America Corp DE now owns 69,108,183 shares of the information services provider's stock worth $21,630,861,000 after acquiring an additional 3,218,852 shares during the period. Institutional investors own 40.03% of the company's stock.

About Alphabet

Alphabet Inc is the holding company created in 2015 to organize Google and a portfolio of businesses developing technologies beyond Google’s core internet services. Its principal operations are led by Google, which builds and operates consumer-facing products such as Google Search, YouTube, Android, Chrome, Gmail, Google Maps and Google Workspace, as well as advertising platforms (Google Ads and AdSense) that historically generate the majority of its revenue. Google also develops consumer hardware (Pixel phones, Nest smart-home devices, Chromecast) and developer and distribution platforms such as Google Play.

Beyond Google’s consumer and advertising businesses, Alphabet invests in enterprise and infrastructure offerings through Google Cloud, which provides cloud computing, data analytics and productivity services to businesses and institutions.

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