Assessing Alphabet (GOOGL) Valuation As AI Momentum Builds Ahead Of Upcoming Earnings

Find your next quality investment with Simply Wall St’s easy and powerful screener, trusted by over 7 million individual investors worldwide.

Investor attention is squarely on Alphabet (GOOGL) this week as the company heads into its fourth quarter 2025 earnings release, with expectations focused on AI progress, Google Cloud performance, and the integration of Gemini across its products.

See our latest analysis for Alphabet.

Alphabet’s share price has climbed 23.83% over the past 90 days and 9.06% year to date, while its 1 year total shareholder return of 71.46% and 3 year total shareholder return of about 2.4x suggest strong momentum as investors react to ongoing AI product rollouts, Google Cloud developments, and the focus on Gemini across Search, Chrome, and partnerships such as the planned Siri integration.

If Alphabet’s AI story has your attention, it could be a good moment to broaden your radar with other high growth tech and AI stocks that are helping shape where capital is flowing next.

With Alphabet trading near its analyst price target and an intrinsic value estimate that implies a premium, the key question is whether current AI optimism leaves any mispricing or if the market is already charging ahead for future growth.

According to the most followed narrative, Alphabet’s fair value of $340 sits just under the last close at $343.69, so expectations are already running quite high.

Alphabet is a compounding machine hiding under an ad empire. With AI monetization finally catching fire, Cloud turning profitable, and more YouTube monetization coming, this is not just a “big tech stock”, it is an innovation platform priced like a mature business. You get high-margin growth, substantial cash flow, a strong balance sheet, and exposure to areas including AI and driverless cars.

Read the complete narrative.

The fair value estimate in this narrative leans heavily on double digit earnings growth, rich margins, and a future profit multiple that assumes considerable staying power.

Result: Fair Value of $340 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, this bullish setup still faces real tests, including potential regulatory action around search and ads, as well as AI competition that could pressure returns on Gemini investments.

Find out about the key risks to this Alphabet narrative.

If you prefer to challenge these assumptions or would rather work straight from the numbers, you can build your own view in minutes with Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Alphabet.

If you are serious about building a better watchlist, do not stop at one stock. Use focused screeners to surface fresh opportunities before everyone else notices them.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include GOOGL.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com