As Google Launches Gemini 3 Flash, Should You Buy, Sell, or Hold GOOGL Stock?

Core Insights - The global AI data-center market is expected to grow from approximately $236 billion in 2025 to $933 billion by 2030, representing a 31.6% compound annual growth rate (CAGR) [1] - Alphabet's Gemini platform aims to capitalize on this demand with the new Gemini 3 Flash release, which is designed for faster and more efficient AI operations at scale [1] Company Performance - Alphabet's stock is currently trading at $307.16, reflecting a year-to-date increase of 62.3% [4] - The company has a market capitalization of around $3.7 trillion and a price-to-sales (P/S) ratio of 10.6x, significantly higher than the sector median of 1.2x, indicating a premium valuation [4] - In the third quarter, Alphabet reported a net income of approximately $35 billion and earnings per share (EPS) of $2.87, exceeding the consensus estimate of $2.26 by 27% [5] - Total revenue for the quarter was $102.3 billion, with Google Services contributing $87.1 billion and Google Cloud adding $15.2 billion [5] Financial Metrics - The GAAP operating income was about $31.2 billion, resulting in a 30.5% operating margin; adjusting for a $3.5 billion European Commission fine, the operating income increased to approximately $34.7 billion, with a margin of nearly 33.9% [6] - The profitability translated into free cash flow of roughly $24.5 billion for the quarter, leaving Alphabet with close to $100 billion in cash and marketable securities, providing significant resources to support the Gemini 3 Flash initiative [6] Market Outlook - Wall Street analysts are raising price targets for Alphabet, with Pivotal Research increasing its target from $350 to $400, indicating a potential upside of about 25% from current levels [2] - The positive outlook is supported by expectations of multi-year growth in Google Cloud and strengthening free cash flow, which are seen as key drivers for Gemini-related expansion [2]