After making rapid strides in artificial intelligence (AI), Alphabet’s (GOOG) (GOOGL) Google is now racing ahead into its next big tech frontier, quantum computing. The tech giant first caught attention back in December 2024 when it introduced its “mind-boggling” Willow quantum chip, claiming it could tackle complex problems in just five minutes, tasks that would take even the world’s fastest supercomputers an unbelievable 10 septillion years to complete.
Fast forward to now, and Google has taken an even bigger leap. Its Quantum AI division has achieved the “first-ever verifiable quantum advantage,” marking a major breakthrough toward reaching the first-ever real-world application of quantum computing. Using its “Quantum Echoes” algorithm, the Willow chip performed calculations 13,000 times faster than the classical algorithm in the world’s fastest supercomputer.
Google’s CEO, Sundar Pichai, shared the big news on X (formerly Twitter), explaining that this new algorithm can model how atoms interact in molecules using nuclear magnetic resonance, which would unlock massive breakthroughs in drug discovery and materials science. This breakthrough brings Google one step closer to harnessing the true power of quantum computing, a race that also includes competitors such as Microsoft (MSFT), IBM (IBM), and several ambitious start-ups in hot pursuit.
That being said, is now the right time to buy GOOGL shares?
About Google Stock
Fueled by a diverse mix of revenue streams, Google’s tech dominance is hard to miss. The California-based powerhouse leaves its mark across nearly every corner of the digital world, from its lucrative advertising business and rapidly growing cloud division to ad-supported streaming, self-driving tech, and even healthcare innovations. Yet what truly sets Google apart today is its early and strategic bet on AI and quantum computing.
Long before AI took the tech world by storm, Google was quietly embedding it into its core products, such as Search, YouTube, and Maps. Those early efforts have now come together in Gemini, the company’s flagship AI model suite, which serves as the centerpiece of its strategy to lead the AI race. And on the quantum computing front, Google is making waves with its Willow chip, recently achieving the first-ever verifiable quantum advantage.
Currently valued at a massive market capitalization of about $3 trillion, shares of this search engine giant faced some turbulence recently as investors reacted to a bold new challenge from OpenAI. On Oct. 21, OpenAI unveiled ChatGPT Atlas, an AI-powered browser designed to rival Google’s core search and browser businesses. By launching Atlas, the ChatGPT maker is making its most aggressive move yet into Google’s territory.
With integrated AI chat and summary features, Atlas could shake up the way users interact with the web and potentially disrupt Google’s traditional digital ad model, which depends on clicks and traffic. Still, despite this looming threat, Google’s stock continues to perform strongly on Wall Street, buoyed by solid business fundamentals and the company’s relentless innovation across AI, cloud, and quantum computing.
Over the past year, GOOGL stock has climbed a notable 60.4%, sailing past the broader S&P 500 Index’s ($SPX) 17.1% gain. In 2025, it’s up another 37.9%, again leaving the broader market’s modest 15.6% return far behind. The stock just touched a record high of $261.68 today and is holding strong, just 0.2% below that peak, highlighting its impressive momentum.
A Look Inside Google’s Q2 Earnings Report
The tech powerhouse dropped its fiscal 2025 second-quarter results on Jul. 23, which came in well ahead of Wall Street expectations, showcasing the company’s resilience even amid competitive pressures. For the quarter, revenue climbed about 14% year-over-year (YoY) to $96.4 billion, sailing past the $94 billion consensus, while EPS also jumped 22% to $2.31, beating estimates by a 7.4% margin.
Operating income grew 14% annually to $31.3 billion, with a strong 32% operating margin driven by top-line growth and disciplined spending. By quarter-end, Google held a substantial $95 billion in cash and marketable securities, highlighting its financial firepower. Google also delivered significant value to shareholders during the quarter, with $13.6 billion spent on share repurchases and $2.5 billion paid in dividends, underscoring its focus on rewarding investors.
Digging deeper, we see continued strength in the Google Cloud division, with revenue surging 32% YoY to $13.6 billion, fueled by widespread adoption of Google Cloud Platform (GCP) offerings, AI infrastructure, and generative AI solutions. The cloud backlog hit a staggering $106 billion, up 18% sequentially and 38% YoY, underscoring strong demand from both new and existing clients.
Meanwhile, Google’s core Search and advertising businesses also remained resilient despite rising competition in the AI arena. Search revenue grew 11.7% YoY to $54.1 billion, and total advertising climbed 10.4% to $71.3 billion, demonstrating the company’s ability to defend its market dominance. During the company’s Q2 earnings call, CEO Sundar Pichai highlighted the company’s accelerating AI momentum.
Gemini, home to Google’s AI chatbot, now boasts over 450 million monthly active users, while AI Overviews, the AI-powered search summarization tool, reaches over 2 billion monthly users across more than 200 countries and territories. Moreover, to support this growth, Google raised its fiscal 2025 capital expenditure plan to roughly $85 billion, up from the previous forecast of $75 billion, driven by surging demand for cloud services and AI solutions.
In fact, management expects Google’s capital expenditures to rise even further in fiscal 2026, fueled by strong customer demand and growth opportunities across the company’s various business segments. The tech giant is gearing up to release its fiscal 2025 third-quarter financial results after the market closes on Wednesday, Oct. 29. Ahead of this announcement, analysts are projecting a 7.1% annual increase in EPS to $2.27. Looking further ahead, Wall Street expects Google’s fiscal 2025 earnings to climb 23.5% YoY to $9.93 per share,
How Are Analysts Viewing GOOGL Stock?
On Oct. 20, Bank of America reaffirmed its “Buy” rating on Google and raised the price target from $252 to $280 per share, setting the stage ahead of the company’s upcoming earnings. The firm’s checks indicate that Q3 advertising spend is outperforming expectations, driven by improving macro conditions, rising data usage, and stronger ad investments.
The investment firm also anticipates steady growth in paid clicks for Google Search, which could help offset AI-related disruption risks and potentially support multiple expansions. BofA also highlighted growing traction for Google’s Gemini AI platform and noted that recent Cloud deals could further boost backlog growth.
Overall, Wall Street remains highly optimistic about GOOGL, with the stock earning a consensus “Strong Buy” rating. Of the 56 analysts covering it, 42 see it as a “Strong Buy,” five view it as a “Moderate Buy,” and nine recommend “Hold.” The stock is trading just above its average analyst price target of $259.90, while the Street-high target of $310 suggests that the stock can rally as much as 19% from here.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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