Alphabet (GOOGL) Stock Forecast & Price Target

Alphabet's financial outlook appears positive as evidenced by a robust backlog growth of 46% quarter-over-quarter and 79% year-over-year, indicating strong demand for its cloud services with a backlog totaling $155 billion. Additionally, the company's Google Cloud segment reported a significant operating income of $3.6 billion, marking an 85% year-over-year increase and operating margins of 23.7%, which underscores operational efficiency. Furthermore, consolidated revenues reached $102.3 billion, reflecting a 16% year-over-year growth, driven by solid performances in Google Services, notably with advertising revenues from Google Search and YouTube, while earnings per share surged by 35% year-over-year.

Alphabet's third-quarter 2025 operating income growth of 9% year-over-year and a declining operating margin of 30.5% reflect a concerning trend in profitability, particularly when compared to earlier quarters where margins were consistently higher. Additionally, the company's third-party network revenues fell 3% year-over-year, marking a continual decline over multiple quarters, signaling pressure on its revenue base. Compounding these challenges, rising competition from generative AI and alternative search methods poses a significant threat to Google's core advertising revenue stream, which constitutes nearly 90% of its overall income.