Alphabet(US:GOOG) ZACKS·2025-10-15 18:30Core Insights - Alphabet (GOOGL) shares have increased by 34% over the past three months, outperforming the Zacks Computer and Technology sector's growth of 13.3% and the Zacks Internet Services industry's 30.7% [1] - The favorable antitrust ruling and advancements in AI capabilities are key factors contributing to GOOGL's strong performance [2][6] Stock Performance - GOOGL shares have outperformed major competitors like Microsoft (1.5% increase), Apple (17.9% increase), and Amazon (3.1% decrease) during the same period [1] - The company’s search business maintains a dominant market share of approximately 90%, significantly ahead of Microsoft's Bing at 3.88% [8] Regulatory Environment - A recent antitrust ruling favored Alphabet, allowing it to retain its Chrome browser and Android operating system without severe remedies proposed by the DOJ [6] - However, GOOGL must now share search data with rivals and is restricted from exclusive contracts related to its services [7] AI Developments - Alphabet is enhancing its search capabilities through AI, with features like Circle to Search active on over 300 million devices [10] - AI Overviews are reaching over 2 billion users monthly, driving a 10% increase in global queries [11] - The introduction of AI Mode has led to users generating queries that are twice as long as traditional searches [12] Financial Outlook - The Zacks Consensus Estimate for Q3 2025 earnings is $2.29 per share, indicating an 8% year-over-year growth, while Q4 2025 earnings are estimated at $2.53 per share, reflecting a 17.7% increase [14] - The overall earnings estimate for 2025 is projected at $9.95 per share, suggesting a 23.8% growth compared to 2024 [15] Investment Considerations - The company is expected to invest approximately $85 billion in capital expenditures in 2025 to enhance its technical infrastructure [17] - GOOGL's valuation is currently stretched, with a forward price/sales ratio of 8.09X compared to industry averages [18]