Core Insights - The third quarter of 2025 was marked by strong performance in US equities, driven by optimism regarding the Federal Reserve's dovish stance and a boom in artificial intelligence [1] - Mar Vista U.S. Quality Premier Strategy reported a return of +6.41% net of fees, underperforming the Russell 1000 Index and S&P 500 Index, which returned +8.00% and +8.12% respectively [1] Company Performance - Alphabet Inc. (NASDAQ:GOOG) showed a one-month return of 1.94% and a significant 52-week gain of 50.42%, closing at $245.46 per share with a market capitalization of $2.963 trillion on October 08, 2025 [2] - In Q2 2025, Alphabet Inc. achieved revenue of $96.4 billion, reflecting a 14% increase compared to Q2 2024 [4] Investment Outlook - The investor focus on Alphabet Inc. is expected to shift back to its fundamentals, with anticipated low double-digit growth driven by its leadership in search, AI, cloud computing, and YouTube [3] - The company's competitive advantages, including its core search franchise and robust AI platform, position it well for sustained earnings per share (EPS) growth in the high teens to 20% range, justifying a 20x–25x earnings multiple [3] - Alphabet Inc. ranks 7th among the 30 Most Popular Stocks Among Hedge Funds, with 178 hedge fund portfolios holding its stock at the end of Q2 2025, up from 164 in the previous quarter [4]

Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for ...

Alphabet Inc. (NASDAQ:GOOG) is one of the 11 Most Profitable Blue Chip Stocks to Buy Right Now. Alphabet Inc. (GOOG) Increases Its Ownership of TeraWulf Inc. to 14% Pixabay/Public Domain By increasing its ownership of TeraWulf Inc. to 14% on September 26, 2025, and offering a $3.2 billion backstop for the cryptocurrency miner’s $3 billion debt raise arranged by Morgan Stanley, which is scheduled to begin in October through high-yield bonds or leveraged loans, Alphabet Inc. (NASDAQ:GOOG) strengthened its ...

Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” annual investor letter. A copy of the letter can be downloaded here. The year was strong for the fund despite volatility, backed by the new US administration. The fund returned 33.4% net of fees and expenses compared to 18.4% for its benchmark. Since its inception in December 2017, the Fund has returned 254.4% compared to 139.9% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). In ad ...

My earlier bullish call on Alphabet/Google (NASDAQ: GOOGL ), (NASDAQ: GOOG ), has aged well. Since late April, the stock has climbed around 62%, impressively outperforming the wider U.S. market. That’s a big win for anyone whoI am a highly experienced Chief Financial Officer (CFO) with a strong background in the oilfield and real estate industries. With over a decade of experience in finance, I have led numerous complex due diligence efforts and M&A transactions, both domestically and internationally.In rec ...

Mairs & Power, an investment advisor, released the “Mairs & Power Balanced Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The quarter started with tariff uncertainty, conflicts in the Middle East, rising national debt, and the worst start to a year for the dollar; however, it bounced back to rise 25% from that low by the end of the quarter. The fund returned 2.66% in the first half of 2025. The fund underperformed the benchmark composite indexes (60% S&P 500 Total Re ...

Core Insights - Alphabet's Google Services segment revenues are benefiting from increased advertising revenues, particularly from Search and YouTube ads, with revenues rising 11.7% year over year to $82.54 billion, accounting for 85.6% of total revenues in Q2 2025 [1][4][10] - The company is enhancing its AI capabilities, with AI Overviews reaching over 2 billion users monthly and supporting more than 70 languages for live translation [1][3][10] - Alphabet faces significant competition from Apple and Microsoft in the AI-powered services sector, with both companies making strides in integrating AI into their products [5][6][7] Google Services Performance - Google Services revenues increased to $82.54 billion, representing an 11.7% growth year over year, and are projected to reach $84.51 billion in Q3 2025, indicating a 10.5% growth from the previous year [4][10] - The Zacks Consensus Estimate for 2025 earnings is $10 per share, reflecting a 24.4% growth from fiscal 2024 [13] Competitive Landscape - Apple is expanding its AI capabilities across its devices, with updates to Apple Intelligence in multiple languages [6] - Microsoft is enhancing Bing's capabilities through AI integration, including the introduction of Copilot Search and other AI tools [7] Stock Performance and Valuation - Alphabet's shares have appreciated 12.4% year to date, slightly underperforming the broader technology sector's return of 12.9% [8] - The stock is trading at a forward price/sales ratio of 7.12X, higher than the sector average of 6.66X, indicating a premium valuation [15]

Core Insights - Alphabet Inc. is experiencing all-time high stock prices driven by advancements in artificial intelligence and cloud initiatives, with the stock reaching $210.52 on August 25, 2025 [1] - The company's Q2 results highlight Google Search, YouTube, and Cloud as reliable growth drivers, with significant AI investments leading to new partnerships and revenue streams [2] Partnerships - Alphabet is rapidly expanding in the cloud-computing market, benefiting from partnerships with companies like NVIDIA and PayPal [3] - A recent six-year cloud computing agreement with Meta Platforms is valued at over $10 billion, marking a significant partnership following a similar deal with OpenAI [3] - Apple is reportedly in discussions with Alphabet to integrate Gemini AI models into Siri, potentially giving Alphabet access to a large portion of the global smartphone market [4] Waymo Growth - Waymo, Alphabet's autonomous driving unit, has seen substantial growth, with over 700,000 recorded monthly paid trips as of March 2025, a 55-fold increase from August 2023 [5] Q2 2025 Earnings Results - Alphabet's Q2 2025 earnings were $2.31 per share, exceeding estimates by 7.44% and growing 22.2% year over year [6] - Google Cloud revenues increased by 31.7% year over year to $13.62 billion, surpassing estimates by 4.24% [7] - Google Services revenues rose 11.7% year over year to $82.54 billion, accounting for 85.6% of total revenues, beating estimates by 3.28% [7] Advertising and Subscriptions - Google advertising revenues grew 10.4% year over year to $71.34 billion, making up 74% of total revenues and exceeding estimates by 3% [8] - Google subscriptions, platforms, and devices revenues reached $11.2 billion in Q2, up 20.3% year over year, also beating estimates by 4.72% [8] Valuation - Alphabet shares have increased by 9.7% year-to-date and 24.6% over the past 12 months, outperforming the Zacks Internet – Services Market and the Computer & Technology sector [9] - The stock trades at an EV/EBITDA multiple of 17.6X, compared to 14.1X for the Computer Software-Services Market, indicating it is not highly overvalued [10] Price Target - Analysts have set an average price target of $220.43 for Alphabet, representing a 5.72% increase from the last closing price of $208.50 [12] ETFs in Focus - Several ETFs with high exposure to Alphabet include Fidelity MSCI Communication Services Index ETF (14%), Vanguard Communication Services ETF (13%), and iShares Global Comm Services ETF (12.9%) [13]

Core Viewpoint - Alphabet's recent earnings report shows strong performance with significant year-over-year growth in earnings and revenues, raising questions about the sustainability of this positive trend leading up to the next earnings release [1][2]. Financial Performance - Alphabet's Q2 2025 earnings were $2.31 per share, exceeding estimates by 7.44% and growing 22.2% year over year [2]. - Total revenues reached $96.43 billion, a 13.8% increase year over year, with net revenues (excluding TAC) at $81.72 billion, surpassing estimates by 2.2% and growing 14.5% year over year [3]. - Google Cloud revenues surged 31.7% year over year to $13.62 billion, accounting for 14.1% of total revenues and beating estimates by 4.24% [4]. - Google Services revenues increased 11.7% year over year to $82.54 billion, making up 85.6% of total revenues and exceeding estimates by 3.28% [5]. - Google advertising revenues rose 10.4% year over year to $71.34 billion, representing 74% of total revenues and beating estimates by 3% [6]. Segment Performance - Search and other revenues increased 11.7% year over year to $54.19 billion, surpassing estimates by 3.04% [6]. - YouTube's advertising revenues improved 13.1% year over year to $9.77 billion, beating estimates by 2.9% [6]. - Google Network revenues decreased 1.2% year over year to $7.35 billion but still beat estimates by 2.88% [7]. - Google subscriptions, platforms, and devices revenues were $11.2 billion, up 20.3% year over year, exceeding estimates by 4.72% [7]. - Other Bets' revenues were $373 million, up 2.2% year over year, but missed estimates by 12.16% [7]. Cost and Margin Analysis - Operating expenses were $65.16 billion, up 13.7% year over year, with the operating margin at 32.4%, expanding 10 basis points year over year [8]. - Google Services' operating margin was 40.1%, contracting 10 basis points year over year, while Google Cloud's operating income increased to $2.83 billion from $1.17 billion year over year [8]. Balance Sheet and Cash Flow - As of June 30, 2025, cash and marketable securities totaled $95.15 billion, slightly down from $95.33 billion as of March 31, 2025 [10]. - Long-term debt increased to $23.61 billion from $10.89 billion, following the issuance of $12.5 billion in senior unsecured notes [11]. - Cash generated from operations was $27.75 billion in Q2 2025, down from $36.15 billion in Q1 2025, with capital expenditures of $22.45 billion, resulting in free cash flow of $5.3 billion [11]. Future Outlook - Alphabet expects to increase capital expenditures to $85 billion for 2025 [12]. - Consensus estimates for Alphabet have trended upward, with a 5.39% increase due to recent performance [13]. - Alphabet holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [15].

Investment Rating - The report maintains a "Positive" investment rating for the industry [9]. Core Insights - Alphabet's Q2 2025 financial results show revenue of $96.43 billion, a year-on-year increase of 13.8%, and a net profit of $28.2 billion, up 19.4% [2][6]. - The company's capital expenditure (Capex) guidance for the year has been raised by $10 billion to $85 billion, with Q2 Capex reaching $22.4 billion, reflecting a year-on-year increase of 70% and a quarter-on-quarter increase of 31% [6][10]. - Strong demand in the cloud business is evidenced by a backlog of orders reaching $106 billion, with significant growth in high-value contracts [10]. - The monthly average token usage for AI applications has doubled from 48 trillion in May to 98 trillion, indicating explosive growth in AI product engagement [10]. Summary by Sections Financial Performance - Alphabet reported Q2 2025 revenue of $96.43 billion, a 13.8% increase year-on-year, and a net profit of $28.2 billion, up 19.4% [2][10]. - Google Services generated $82.5 billion in revenue, a 12% increase, while Google Cloud revenue reached $13.62 billion, growing 32% with a significant operating profit increase [10]. Cloud Business Insights - Google Cloud's operating profit surged to $2.83 billion, a 141% year-on-year increase, with a profit margin of 20.7%, up 9.4 percentage points [10]. - The number of new customers for Google Cloud Platform (GCP) increased by nearly 28% quarter-on-quarter, with high-value orders (over $2.5 billion) doubling year-on-year [10]. AI Developments - Monthly token processing for AI applications increased from 48 trillion in May to 98 trillion, marking a 100% growth [10]. - The Gemini application has reached 450 million monthly active users, with a 50% increase in daily requests compared to Q1 [10]. Capital Expenditure and Industry Trends - Alphabet's capital expenditure for 2025 has been revised to $85 billion, with Q2 spending at $22.4 billion [6][10]. - Major tech companies, including Meta, Microsoft, and Oracle, are significantly increasing their investments in AI infrastructure, indicating a competitive arms race in the North American cloud market [10].