When Alphabet, Google's parent company, discloses its third-quarter financial results, the spotlight will be firmly on the performance of its cloud computing segment. This division's success is critical, as it has the potential to significantly influence Google's stock trajectory. A key factor in this anticipation is the \"bogey\" number, an informal target that institutional investors use to gauge a company's financial performance. Surpassing this internal benchmark is often seen as a prerequisite for a positive stock movement, differentiating it from the more commonly known sell-side consensus estimates from Wall Street analysts.
Analysts are forecasting an 8% increase in Google's earnings per share to $2.28 and a 13% rise in revenue, reaching $99.9 billion. More specifically for its cloud sector, a 29% growth to $14.65 billion in revenue is projected. However, the investor community's \"bogey\" for Google Cloud's growth is even higher, with UBS analyst Karl Keirstead noting that a 35% growth is expected to impress. This elevated expectation reflects a broader trend where demand for core cloud infrastructure services has intensified, largely driven by the boom in artificial intelligence. This AI surge is not only propelling Google Cloud but also intensifying competition with rivals such as Amazon Web Services (AWS) and Microsoft Azure, with Microsoft’s partnership with OpenAI further boosting its market position. The substantial capital expenditures by these tech giants in AI infrastructure, with a combined annualized revenue run-rate of $265 billion for AWS, Azure, and Google Cloud, underscore the intense investment in this rapidly expanding sector.
Google's strategic moves, such as the acquisition of cybersecurity firm Wiz and the development of its proprietary AI accelerator chips (TPUs), are designed to strengthen its cloud offerings and enhance its competitive edge against companies like Nvidia. These initiatives are crucial as more businesses adopt multi-cloud strategies, evidenced by OpenAI, Meta Platforms, and Anthropic utilizing Google Cloud. The market has responded positively to Google's performance, with its stock gaining 41% in 2025 and hitting a new all-time high of $256, pushing its valuation past the $3 trillion mark. The stock also boasts a Relative Strength Rating of 91 and an IBD Composite Rating of 98, indicating strong fundamental and technical performance that positions Google as a compelling investment in the burgeoning AI and cloud computing landscape.
The relentless pursuit of innovation and strategic expansion in the technology sector, particularly in AI and cloud computing, exemplifies a forward-thinking approach that drives progress. Companies like Alphabet, through their commitment to advancing technology and adapting to market demands, not only achieve commercial success but also contribute significantly to the broader technological ecosystem. This dedication fosters an environment where new possibilities emerge, pushing the boundaries of what technology can achieve for society and the global economy.