Shares in Alphabet (GOOGL) Stock boomed on Thursday after the Google developer posted better-than-expected Q3 earnings. Earnings per share came in at $2.87, well ahead of Wall Street’s consensus estimate for $2.26, according to FactSet, and up from $2.12 last year. Revenue for the quarter reached $102.3 billion, higher than expectations of $99.9 billion, and up 16% on the year.
Alphabet stock was up more than 5% to $289.38 in early Thursday trading, but has since settled around $285. Prior to the earnings report, Wall Street analysts raised their GOOGL projections, hinting at faith in a better-than-expected earnings report. With the Google earnings delivering on that and then some, more positive price revisions are expected.
Outside of solid quarterly revenue, Google also raised its guidance for 2025 spending on artificial-intelligence data centers for its Google Cloud segment. It now stands at $92 billion, up from the previous $85 billion projection. The company expects a “significant increase” in this spending next year. Furthermore, like other big AI spenders, Alphabet turned to debt markets this year, selling $12.5 billion in bonds in May. Alphabet came into the AI race with little debt, so it has a lot more room to borrow, on top of its $98 billion in cash and short-term investments.
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While this spending has been a worry for many Wall Street investors in the past year for multiple companies, Alphabet has delivered on solid ROI for those AI investments, keeping investors hooked.
Wall Street analyst Mark Shmulik at Bernstein raised his price target from $210 to $260 on Alphabet (GOOGL) stock earlier this week, while keeping his Hold rating. Similarly, research analysts at Oppenheimer raised their GOOGL forecast from $270.00 to $300.00 on Monday. GOOGL is trading near the top of its 52-week range and above its 200-day simple moving average. Per a CNN survey of Wall Street experts, 84% of 75 analysts suggest buying the stock now, while 16% are opting to hold GOOGL shares, and none advise selling.