After encountering challenges earlier this year due to stiff competition in artificial intelligence (AI) and various regulatory issues, Alphabet (GOOG) (GOOGL) is looking to regain its momentum as it approaches 2025. A significant factor in this renewed enthusiasm is the introduction of Gemini 3, touted as the most advanced large-scale language model (LLM) to date. This model, which launched last month, is already viewed as a formidable contender against OpenAI’s ChatGPT.
Simultaneously, there’s a growing demand for Google’s custom AI chips, with several major companies eager to gain access. These swift advancements in AI help Google show that it continues to be a major player in tech innovation, not to be overlooked. Wall Street appears to share this sentiment.
In fact, Google’s stock saw modest gains. Pivotal Research has expressed strong belief in the company, raising its price target to $400 based on the positive momentum in AI and consistent growth across Google’s primary business sectors. With growing investor excitement and Google introducing innovative updates at a rapid pace, there’s speculation about whether the tech giant can elevate itself even higher by 2026.
About Google stock
Founded in 1998, Google is a name that most recognize. Many of us engage with its various services multiple times daily—searching the web, watching videos on YouTube, navigating with Maps, and so forth. Now, this California tech behemoth is pouring its ambitions into AI. The newly unveiled Gemini 3 is seen as its most sophisticated LLM yet, and some say it’s the most powerful AI model the company has produced.
Additionally, Google Cloud is transforming into a bustling center for AI innovation, and its in-house AI chips are starting to challenge the long-standing supremacy of Nvidia (NVDA) in the GPU market. Interestingly, while Tesla (TSLA) has long invested in AI-driven robotaxis, Google’s Waymo division is already active, offering self-driving ride-hailing in multiple locations.
These developments highlight Google’s aggressive expansion in the AI field. Initially, investors were concerned that Google was lagging behind in the AI race, especially since it started 2025 off less than strong. Currently, Google boasts a market valuation of around $3.9 trillion, reinforcing its status as one of the most valuable companies globally.
What’s noteworthy is that Google stock has been the standout performer among the Magnificent Seven this year, soaring by 65.3% in 2025. This is impressive, considering that other tech giants and the broader S&P 500 index, which only rose by 16.19%, pale in comparison. The tech company reached a 52-week high of $328.83 recently, although it has seen about a 5% dip since that peak.
Google’s third-quarter financial snapshot
In its Q3 2025 earnings report, Google surpassed Wall Street’s expectations for both revenue and profits. Sales surged by 16% year-over-year to $102.3 billion, exceeding the forecast of $100.1 billion. This growth primarily stemmed from a 14% rise in Google services revenue, totaling $87.1 billion—with strong contributions from search, YouTube ads, and subscriptions among others.
The search sector remains dominant, with a 14.6% yearly revenue increase amounting to $56.6 billion, while total ad revenue grew by 12.6% to $74.2 billion. Google Cloud also shone brightly, with a 34% revenue rise to $15.2 billion, highlighting increasing demand for enterprise cloud and AI solutions. The company’s operating income climbed by 9% to $31.2 billion, leading to an operating margin of 30.5%—although this figure would have been closer to 34% without a $3.5 billion antitrust penalty imposed by the European Commission.
Moreover, earnings per share (EPS) stood impressive at $2.87, reflecting a 35.4% year-over-year growth, surpassing analysts’ expectations by about 27%. Google emphasized its “full-stack approach to AI,” reporting that its first-party models, including Gemini, are currently processing an astonishing 7 billion tokens per minute, while the Gemini app has attracted over 650 million monthly active users.
Additionally, management revealed that Google Cloud’s backlog has surpassed $155 billion, pointing to rising demand for cloud and AI offerings. Looking ahead, the company outlined plans for fiscal 2025 capital expenditures between $91 billion and $93 billion, with a clear emphasis on continued investments in AI and infrastructure.
What do analysts expect from Google stock?
Pivotal Research has recently raised its price target for Google from $350 to $400, maintaining a “buy” rating while highlighting solid momentum across its main business units. The firm describes Google’s search division as a robust source of revenue, underpinning the success of its Gemini AI platform.
The analysis indicates that if Gemini gains traction, Google could see improved economics and increased profits from device manufacturers compared to traditional search partnerships. Pivotal is optimistic that Gemini can capture market share from OpenAI, largely aided by the strengthening AI collaboration between Google and Apple (AAPL).
This shift, the firm suggests, might edge OpenAI into a position of financial strain by 2026, due to significant obligations and potential declines in its share. On the hardware side, Pivotal also emphasizes Google’s Tensor Processing Unit (TPU) as a long-term competitive advantage. If Google succeeds in marketing TPUs to other firms, they could prove to be an essential value generator, potentially helping to wrest market share from Nvidia.
Overall, Wall Street’s confidence in Google remains robust. The stock is currently rated as a Strong Buy, with a breakdown indicating a consensus among 54 analysts: 43 rate it as a “strong buy,” 4 recommend a “moderate buy,” and only 7 suggest holding.
While the average price target of $324.88 indicates a modest possible upside of around 4%, Pivotal Research projects a more optimistic target of $400, suggesting that Google may still have around 21.5% upside potential from current valuations.
