Yahoo Finance·2026-01-23 16:46Core Insights - Alphabet is solidifying its position in next-generation AI architecture with its Gemini models, adapting to the digital era and defining its strategic direction [1] - The company has evolved from a search engine to a $3.96 trillion technology powerhouse, expanding into AI, cloud computing, and autonomous mobility [2] Financial Performance - Alphabet reported Q3 revenue of $102.3 billion, a 16% year-over-year increase, surpassing market expectations [10] - Google Services generated $87.1 billion in revenue, growing 14% annually, with Search revenue climbing 14.6% to $56.6 billion [11] - Operating income rose 9% to $31.2 billion, resulting in a 30.5% operating margin, while EPS jumped 35.4% to $2.87, exceeding estimates [12] AI Integration and Growth - AI has been integral to Alphabet's operations since 2017, enhancing products like Gmail and reinforcing its dominance in Search, which holds about 90.8% of the market [5] - The Gemini app has reached 650 million monthly active users, and Google Cloud's backlog has surpassed $155 billion, indicating strong future revenue [13] Stock Performance and Analyst Sentiment - GOOGL stock has increased approximately 5.5% over the past month and is up about 67% over the past 52 weeks [7][8] - Raymond James upgraded GOOGL to a "Strong Buy" with a price target of $400, citing improving business momentum and steady earnings upgrades [16] - Analysts expect Q4 revenue around $111.4 billion, with EPS projected to rise 20% year-over-year to $2.58 [15] Future Projections - For fiscal 2025, capital expenditures are projected between $91 billion and $93 billion, reflecting aggressive investments in AI and infrastructure [14] - Analysts forecast Cloud growth to remain above expectations, with 44% growth in 2026 and 36% in 2027, driven by demand for infrastructure and AI services [17]