Google Cloud Momentum Builds With Anthropic Deal Ahead Of Q3 Earnings. Is Google Stock A Buy?

Core Insights - The cloud computing business is becoming increasingly significant in discussions about Alphabet's stock valuation, although it remains smaller compared to Amazon's cloud services [1][3] - Google stock has seen a 30% increase in 2025, reaching an all-time high of 256 and surpassing a $3 trillion valuation [1] - Google reported second-quarter earnings with cloud revenue of $13.62 billion, exceeding estimates of $13.14 billion [4] Cloud Computing - Google is leveraging its artificial intelligence capabilities to enhance its cloud computing business, attracting new customers like OpenAI and Meta Platforms [5] - The acquisition of cybersecurity firm Wiz for $32 billion is expected to enhance Google's cloud market share against competitors like Amazon and Microsoft [6] - Despite potential revenue growth, profitability remains a concern as Amazon's cloud business has higher gross margins [6] Stock Performance and Technical Analysis - Google stock has recently pulled back but is trading above its 21-day exponential moving average, with a potential sell signal if it falls below this line [2] - The Relative Strength Rating of GOOGL stock is currently 88 out of 99, indicating strong performance [15] - GOOGL stock holds an IBD Composite Rating of 98, reflecting its strong fundamental and technical metrics [16] Antitrust Issues - A federal judge ruled that no asset divestitures are required in an antitrust case related to Google's internet search business, positively impacting stock performance [7] - However, a separate digital advertising antitrust case may lead to significant changes, with the government suggesting Google sell its Google Ad Manager [8][9] AI and Search Innovations - Google is adapting to competition from AI-driven search engines by overhauling its search results, introducing AI Overviews that now have over 1.5 billion monthly active users [10][11] - The new Agent Payments Protocol (AP2) aims to enhance payment processes in AI-driven transactions [12] Capital Expenditure - Google anticipates capital spending to reach $85 billion in 2025, a 62% increase from previous guidance, reflecting the company's commitment to AI and cloud infrastructure [13]