Alphabet (GOOGL) Stock Forecast & Price Target

Alphabet demonstrated robust financial performance as indicated by a 16% year-over-year increase in total revenues, reaching $102.3 billion, which surpassed expectations. The company's Google Cloud division reported a significant 34% year-over-year revenue growth, contributing $15.2 billion, and marked a notable 85% increase in operating income, achieving operating margins of 23.7%. Additionally, with a backlog increase of 46% quarter-over-quarter and 79% year-over-year to $155 billion, Alphabet's growth trajectory appears strongly supported by advancements in AI and the increased demand for its cloud services and advertising platforms.

Alphabet's reported operating income (OI) growth of 9% year-over-year for Q3 2025 reflects a decline in operating margin, which fell to 30.5% from 32.4% in the previous quarter and demonstrates a downward trend throughout the year. Additionally, revenue from third-party networks decreased by 3% year-over-year, indicating persistent challenges in the Open Internet segment, which has seen consecutive declines over the past year. The increasing competition from generative AI and alternative search methods poses a significant threat to Google's market dominance, particularly in its core advertising revenue stream, further exacerbated by ongoing regulatory scrutiny.