Google (Nasdaq: Google) had a strong performance this month, with its stock rising more than 26% as a market share Best performing stocks.
The rally has also gone beyond the broader scope Standard & Poor’s 500making Google the center of investor attention. Now, additional momentum is building ahead of Alphabet’s next earnings report on April 29.
Investors primarily focus on whether a company’s AI (Amnesty International) Efforts have translated into growth. Accordingly, all eyes are on Google Cloud and Gemini.
Gemini and Google Cloud are stimulating investor sentiment
In fact, investor sentiment relied primarily on these two aspects of Alphabet’s business. As a result, strong earnings performance could boost bullish sentiment further.
For example, Citi recently raised its price target on Alphabet to $405 from $390, citing user engagement with Gemini features, trends in ad revenue, and continued momentum in Google Cloud.
Likewise, Evercore ISI analyst Mark Mahaney set a $400 price target on the stock due to demand across core sectors and continued strength in the cloud division. In addition, analysts pointed to a strong build-up in backlogs as a sign of continued demand from businesses.
Overall, Wall Street sentiment remains intact Widely positivewith adjusted EPS expected at around $2.62 and revenue estimates in the range of $106 billion to $107 billion. This number represents approximately 18% to 20% on an annual basis.
Cloud’s momentum is accelerating, but there’s a problem
Notably, in Q4 2025, Google Cloud revenue jumped 48% year over year to $17.7 billion, a notable jump from the 34% growth recorded in the previous quarter. CEO Sundar Pichai also highlighted a 55% sequential increase in cloud backlog ($240 billion).
The strength of this sector has been fueled by enterprise adoption of AI products, including Tensor Processing Units (TPUs), along with solutions linked to models such as Gemini 3.
Naturally, to maintain this momentum, Alphabet will increase its spending significantly. For example, the company expects capital expenditures to reach between $175 billion and $185 billion in 2026, nearly double the amount spent in 2025.
While these investments can deliver significant returns in the long term if demand for AI remains strong, they also involve greater risks. Specifically, consumption expenses increased by 38% to $21.1 billion in 2025.
Increase investment in AI infrastructure and Data centers This is also expected to impact margins, as higher operating costs partially offset growth. Therefore, even if Google Cloud continues to achieve strong growth, profitability may suffer due to higher costs.
Google’s fundamentals remain strong
From a long-term perspective, Alphabet’s fundamentals remain compelling. The company continues to dominate online search, operates a powerful YouTube platform, and is expanding its cloud business.
The company also ended 2025 with $127 billion in cash and cash equivalents, more than its $46 billion in debt. Likewise, the core advertising segment continues to generate free cash flow, while YouTube subscriptions also emerge as a meaningful contribution.
Moreover, Google’s deep intangible assets and entrenched influence on the network should help defend its leadership in search. Of course, the aforementioned investment in artificial intelligence, which is now present in almost all of Alphabet’s products, offers a positive long-term trend.
Thus, although the valuation is not cheap, trading at more than 30 times earnings, it arguably remains reasonable, given the company’s competitive advantages and growth profile.
Is Google stock a call option? Wall Street Google Consensus
Two days before earnings, Google has a “strong buy” consensus on Wall Street, based on 31 available analyst reports Collected During the past three months TipRanks. The average GOOGL stock price itself is $387.68, which means the market is expecting a 12.57% rise in the next 12 months.
Overall, Google stock appears to be an attractive long-term investment. However, given the scale of its spending plans, careful positioning and paying close attention to Google Cloud’s upcoming growth, as well as earnings per share (EPS) numbers, may be wise before and after the next earnings report.
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