Google said it has made its largest solar power and battery storage purchase to date. The first two phases of the project, located in Arkansas, will generate enough electricity to power about 6% of the state’s peak demand, the company said earlier this week.
Electricity from the project will flow directly to the grid, offsetting demand from Google’s data centers. Google is both investing in the project alongside developer Cypress Creek Energy and purchasing the entire output of the first two phases, adding 1 gigawatt of solar capacity and 1.9 gigawatt-hours of battery storage to its portfolio.
When completed, the three-phase project will be the largest solar facility in the United States, the companies said. The third and final phase of the project is scheduled to connect to the grid in 2029, bringing the power plant’s total capacity to about 1.8 gigawatts of solar and 2.9 gigawatt-hours of battery storage. Cypress Creek has secured $3.5 billion in financing to support the first two phases.
The Steel River Energy Center, as the project is called, will be located about 30 miles north of Memphis, Tennessee. By pairing solar panels with large batteries, the power plant will be able to provide power to the grid all day, every day. It will also help Google in its quest to match its electricity use with clean power on an hourly basis, a stringent measure that should help bring more hybrid power plants to the grid.
Google’s decision to invest in a large solar and battery facility stands in contrast to xAI, which operates an unpermitted natural gas power plant about 40 miles to the south.
Elon Musk has invested heavily in natural gas to power xAI’s Colossus data centers, despite running Tesla, which makes solar panels and grid-scale batteries. XAI is running nearly 60 natural gas turbines without federal clean air permits, according to a report from Reuters. Pollution from xAI’s power plant in Mississippi is affecting predominantly Black neighborhoods, Reuters found.
Musk is unlikely to change course. He recently purchased APR Energy, a project developer that specializes in modular natural gas power plants.
Google has also invested in natural gas, working with Crusoe to build a 933-megawatt power plant in West Texas, though that project has been something of an anomaly for the company, which has mostly relied on clean power to expand its portfolio. Given the speed with which projects like Steel River can be deployed — nearly 2 gigawatts of solar capacity in three years — it’s likely that Google will continue to invest in renewables and batteries.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Tim De Chant is a senior climate reporter at TechCrunch. He has written for a wide range of publications, including Wired magazine, the Chicago Tribune, Ars Technica, The Wire China, and NOVA Next, where he was founding editor.
De Chant is also a lecturer in MIT’s Graduate Program in Science Writing, and he was awarded a Knight Science Journalism Fellowship at MIT in 2018, during which time he studied climate technologies and explored new business models for journalism. He received his PhD in environmental science, policy, and management from the University of California, Berkeley, and his BA degree in environmental studies, English, and biology from St. Olaf College.
You can contact or verify outreach from Tim by emailing [email protected].
The European Commission is preparing to issue a new wave of fines against Google, the Financial Times reported Wednesday (July 15). The move marks an escalation in the enforcement of the European Union's digital regulations, according to the report, which cited internal documents and unnamed sources.
The market expects Alphabet (GOOGL - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 22, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis internet search leader is expected to post quarterly earnings of $2.86 per share in its upcoming report, which represents a year-over-year change of +23.8%.
Revenues are expected to be $101.22 billion, up 23.9% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.32% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Alphabet?For Alphabet, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.30%.
On the other hand, the stock currently carries a Zacks Rank of #1.
So, this combination indicates that Alphabet will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Alphabet would post earnings of $2.64 per share when it actually produced earnings of $5.11, delivering a surprise of +93.56%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Alphabet appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
The market expects Alphabet Inc. (GOOG - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 22, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis company is expected to post quarterly earnings of $2.86 per share in its upcoming report, which represents a year-over-year change of +23.8%.
Revenues are expected to be $101.22 billion, up 23.9% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.32% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Alphabet?For Alphabet, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.31%.
On the other hand, the stock currently carries a Zacks Rank of #1.
So, this combination indicates that Alphabet will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Alphabet would post earnings of $2.64 per share when it actually produced earnings of $5.11, delivering a surprise of +93.56%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Alphabet appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
A specially designed Google logo, during the opening of Google's new Artificial Intelligence (AI) centre in Berlin, Germany, March 5, 2026. REUTERS/Annegret Hilse/File Photo Purchase Licensing Rights, opens new tab
CompaniesLUXEMBOURG, July 15 (Reuters) - Alphabet (GOOGL.O), opens new tab unit Google on Wednesday urged Europe's top court to dismiss EU antitrust regulators' appeal against a lower court ruling that scrapped a €1.49 billion ($1.7 billion) fine, saying the regulators' arguments were flawed.
The dispute reached the Court of Justice of the European Union after regulators appealed a 2024 General Court ruling that annulled the fine imposed on Google in 2019. The lower court cited errors in the European Commission's assessment of the case.
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The Commission, the EU's competition watchdog, said Google used restrictive clauses in contracts with publishers that prevented rivals from placing search advertisements on the publishers' websites, reinforcing Google's dominance in online search advertising.
The Commission said the practices ran from 2006 to 2016. Google, whose AdSense platform provides search advertising, removed the contested clauses from publisher agreements in 2016.
"The Commission's new arguments are flawed. The General Court's reasons are clear and complete," he told the panel of five judges.
Holmes said the Commission had ignored evidence showing Google's rivals had substantial opportunities to compete.
Commission lawyer Anthony Dawes criticised the lower court's ruling, saying it imposed an unprecedented obligation on regulators to analyse issues already settled by case law.
"This finding turns case law on its head," he said, adding that the lower court's reasoning would effectively treat exclusive clauses as lawful by default.
A court adviser is due to issue a non-binding opinion on November 12, with a final ruling expected in the following months.
The AdSense fine was one of four EU antitrust penalties that have cost Google €9.5 billion during its nearly two-decade dispute with the Commission. The lower court's decision to annul the fine marked a rare legal setback for the EU watchdog.
The case is C-826/24 P Commission v Google and Alphabet (Google AdSense)
($1 = 0.8771 euros)
Reporting by Foo Yun Chee. Editing by Mark Potter
Our Standards: The Thomson Reuters Trust Principles., opens new tab
An agenda-setting and market-moving journalist, Foo Yun Chee is a 21-year veteran at Reuters. Her stories on high profile mergers have pushed up the European telecoms index, lifted companies' shares and helped investors decide on their next move. Her knowledge and experience of European antitrust laws and developments helped her break stories on Microsoft, Google, Amazon, Meta and Apple, numerous market-moving mergers and antitrust investigations. She has previously reported on Greek politics and companies, when Greece's entry into the eurozone meant it punched above its weight on the international stage, as well as on Dutch corporate giants and the quirks of Dutch society and culture that never fail to charm readers.
Over 30 years ago, the advent and proliferation of the internet vaulted the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite to new heights. After a multidecade wait, the evolution of artificial intelligence (AI) is having the same effect on equity markets.
The most influential businesses on Wall Street that have embraced AI, such as Google parent Alphabet (GOOGL +2.04%)(GOOG +1.93%), social media maven Meta Platforms (META +0.66%), and iPhone maker Apple (AAPL 0.77%), have been handsomely rewarded. Unfortunately, AI is reshaping a trillion-dollar catalyst for Wall Street, which comes with potentially terrifying implications for the second-priciest stock market in history.
Image source: Getty Images.
The stock market's most influential companies want their piece of a $15.7 trillion pie Empowering software and systems with the tools to make autonomous, split-second decisions is, arguably, the largest long-term addressable opportunity we've ever witnessed. According to PwC analysts, AI can create up to $15.7 trillion in global economic value by 2030.
There are several ways to approach this technology from an investment standpoint. While hardware providers have shone brightly, thanks in part to graphics processing unit and memory/storage supply shortages, it's AI application companies that are now garnering attention.
Since Alphabet began incorporating generative AI and large language model capabilities into its cloud infrastructure service platform, Google Cloud, sales have accelerated. In the March-ended quarter, this high-margin platform delivered 63% year-over-year sales growth.
"Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion."
-- Qualtrim (@qualtrim) April 29, 2026 It's been a similar encouraging story for Meta Platforms, which has integrated generative AI into its global advertising platforms. Enabling businesses to tailor static and video messages to users can improve click-through rates and bolster Meta's unrivaled social media ad pricing power.
Apple is also benefiting from its rollout of Apple Intelligence, the company's personal AI system built into its physical devices (e.g., iPhone, iPad, and Mac). Apple's sales growth has reignited since the introduction of Apple Intelligence.
Image source: Getty Images.
Aggressive investments in AI come at a steep cost to Wall Street However, aggressive investments in AI infrastructure have completely reshaped what's been a core catalyst for the stock market since the start of 2018: stock buybacks.
Beginning in 2018, after President Donald Trump's Tax Cuts and Jobs Act was signed into law, the peak marginal corporate income tax rate was permanently lowered from 35% to 21%. With businesses retaining more of their earnings, share repurchases picked up significantly. In 2025, S&P 500 companies were estimated to have repurchased more than $1 trillion of their own stock, according to research by The Motley Fool.
For companies with steady or growing net income, buybacks can boost earnings per share and make them more attractive to value-seeking investors.
But the AI revolution has altered this dynamic. After Alphabet repurchased $346 billion of its stock over the trailing decade (ending Dec. 31, 2025), it announced an $84.75 billion equity offering on June 2 to fund its AI ambitions.
Companies are issuing shares more, buying back less. pic.twitter.com/GbVQ38W59I
-- Cassandra Unchained (@michaeljburry) July 10, 2026 Meta, which has spent over $230 billion on buybacks over the trailing decade (ending Sept. 30, 2025), didn't spend a dime on buybacks in the first quarter of 2026 and, according to reports, has considered an equity offering to build out its AI data center.
Meanwhile, Apple has bought back more of its own stock ($853 billion) since 2013 than any other public company. It's spent 25% less on buybacks through the first six months of fiscal 2026 than it did through the same period in the previous year.
The AI revolution is taking stock buybacks off the table, which may further expose a pricey stock market that's never sustained premiums of this magnitude for any extended period.
In the latest trading session, Alphabet Inc. (GOOG - Free Report) closed at $357.33, marking a +1.9% move from the previous day. The stock's change was more than the S&P 500's daily gain of 0.38%. Elsewhere, the Dow saw an upswing of 0.02%, while the tech-heavy Nasdaq appreciated by 0.9%.
Heading into today, shares of the company had lost 4.48% over the past month, lagging the Computer and Technology sector's loss of 1.5% and the S&P 500's gain of 1.27%.
Investors will be eagerly watching for the performance of Alphabet Inc. in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on July 22, 2026. The company is expected to report EPS of $2.86, up 23.81% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $101.22 billion, indicating a 23.86% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $14.32 per share and revenue of $423.63 billion, which would represent changes of +32.47% and +23.54%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Alphabet Inc. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.14% rise in the Zacks Consensus EPS estimate. Alphabet Inc. currently has a Zacks Rank of #1 (Strong Buy).
From a valuation perspective, Alphabet Inc. is currently exchanging hands at a Forward P/E ratio of 24.49. This represents a premium compared to its industry average Forward P/E of 17.41.
We can also see that GOOG currently has a PEG ratio of 1.5. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Services was holding an average PEG ratio of 1.6 at yesterday's closing price.
The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 94, placing it within the top 39% of over 250 industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
New York Governor Kathy Hochul signed an executive order Tuesday pausing new large-scale data center construction for up to a year -- the first building freeze by any U.S. state. The order applies to facilities that would use 50 megawatts of power or more.
In a statement, the governor said that “data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers” and that it was her “responsibility to take action and lead."
What the executive order doesUnder the executive order, New York's Department of Environmental Conservation will stop issuing discretionary permits for large data centers. Applications already deemed complete will still be processed.
The state will draft a Generic Environmental Impact Statement (GEIS) covering how these facilities affect energy demand, water, and air quality, a process expected to take up to a year. The moratorium will lift once the standards are final.
Image Source: Getty Images
Hochul also said she will pursue legislation repealing the sales-tax exemptions large data centers currently enjoy in New York, and directed regulators to weigh a fund requiring data centers to help cover grid upgrades.
New York's legislature actually passed its own one-year data-center ban in June, but at a lower threshold -- 20 megawatts -- which would cover far more projects. Hochul hasn’t determined if she will sign or veto it. Her office called the bill "complicated."
Why New York is pumping the brakesResidential electricity rates in New York have jumped close to 68% over the past six years. The U.S. Department of Energy (DOE) ranks New York as the 4th most expensive state for residential power.
New York has more than 12 gigawatts of power waiting to be connected to large-scale users like AI data centers. For scale: a single gigawatt is roughly enough electricity to run 750,000 homes.
A recent poll from Siena Research showed public support for a one-year moratorium at 46% of New Yorkers, with just 21% opposed.
Other states are watching closelyThough New York is the first, it’s far from the only state considering some sort of restriction or outright ban on new data centers. Fourteen other states have floated their own limits this year alone. The table below shows the current legislative picture.
What this means for investorsThe order itself is unlikely to affect the big hyperscalers like Alphabet (GOOG +1.93%) (GOOGL +2.04%), Amazon, and Microsoft directly -- none of them have major planned projects in the state and are building elsewhere in the U.S.
Today's Change
(
1.93
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6.77
Current Price
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357.44
But other states are watching to see whether Hochul takes political heat for this. Right now, the polling suggests she won't. If more states follow suit -- states where the major hyperscalers are planning projects -- this could throw a serious wrench in things.
There are already major constraints on building AI compute capacity -- sufficient power is getting harder to come by, for one -- and any additional regulatory or legal hurdles could tip the precarious math underpinning some of these projects in the wrong direction.
At the end of the day, I wouldn’t be too concerned yet when it comes to the Alphabets and Amazons of the world. I would be for smaller operators in less secure financial positions, like CoreWeave.
Alphabet (GOOGL, Financials), the technology company behind Google Search, Android, YouTube and Google Cloud, is facing a preliminary competition investigation
Google said it will fully cooperate with the probe. The Swiss competition authority announced Tuesday that it had opened a preliminary investigation into Google's removal of the "choice screen" feature on Android devices in Switzerland.
The feature allowed users to choose their default search engine during the initial setup of a new Android device.
"Recently, Google removed this feature in Switzerland," the Secretariat of the Competition Commission (COMCO) said in a statement.
"As a result, the Google search engine is imposed as the default on Swiss users, without a 'choice screen' being displayed during the initial setup."
COMCO said the removal could limit the visibility of search engines competing with Google, thereby reinforcing barriers to entry.
"This new practice by Google could affect the ability of search engine providers and, more broadly, other digital service providers to compete," it said.
It also creates unequal treatment between Swiss users and those in the surrounding European Economic Area, "even though the competitive issues are comparable," it added.
The EEA covers 30 countries, extending the 27-member European Union's common market to three other states. Switzerland is not a member of either bloc.
COMCO said that in digital markets, default settings played a decisive role, with the choice screen aiming to reduce the lock-in effects associated with preconfigured settings.
"The preliminary investigation will determine whether there are indications of an unlawful restriction of competition under the Cartel Act," COMCO said.
A Google spokesperson told AFP that the tech giant was aware of the investigation.
"We look forward to cooperating fully with the authority to address their questions," the spokesperson added.
At the start of July, the EU's top court upheld a record 4.1-billion-euro ($4.7 billion) fine the bloc imposed on Google for anti-competitive practices related to its Android operating system.
The European Court of Justice dismissed the U.S. tech giant's second attempt to overturn the penalty imposed by the European Commission in 2018—which remains the EU's highest-ever antitrust fine.
The commission, the 27-nation bloc's antitrust regulator, had accused Google of abusing the popularity of its Android operating system to restrict competition.
It alleged that Google pressured phone makers using Android to preinstall its search engine and Google Chrome browser—essentially shutting out rivals.
Who's behind this story?
Andrew Zinin Master's in physics with research experience. Long-time science news enthusiast. Plays key role in Science X's editorial success. Full profile →
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Key Takeaways Alphabet's AI-powered ad tools and partnerships drove 15.5% ad revenue growth in Q1 2026. GOOGL outperformed Reddit YTD and trades at a lower forward Price/Sales multiple. Reddit's ad revenue rose 74%, but competition and volatility raise investment risk. Reddit (RDDT - Free Report) and Alphabet (GOOGL - Free Report) are major players in the digital advertising space. While RDDT is an emerging social media platform gaining traction with community-driven advertising, GOOGL remains the dominant force in global search and digital ad markets.
Reddit or Alphabet — Which of these Digital Advertising stocks has the greater upside potential? Let’s find out.
The Case for RDDT StockReddit is benefiting from strong demand in its advertising business, which has become a key growth driver of the company’s impressive financial performance and future growth prospects. In the first quarter of 2026, Reddit reported total revenues of $663 million, up 69% year over year, with advertising revenues growing even faster at 74% to $625 million. This marks Reddit’s seventh consecutive quarter of revenue growth of more than 60%, underscoring the sustained momentum in its ad business.
Growth can be attributed to the company’s expanding portfolio, strong user engagement, including rising daily and weekly active users, gains in Average Revenue Per User and the expansion of advertiser tools such as Dynamic Product Ads (DPAs), Reddit Pixel and CAPI.
In the first quarter of 2026, DPAs have also driven more than 90% higher return on ad spend year over year, with brands like Liquid I.V. seeing DPAs outperform other campaigns by 40%. These advancements are attracting a broader range of advertisers. In the first quarter of 2026, active advertisers grew more than 75% year over year.
Reddit’s investments in artificial intelligence (AI)-powered tools remain noteworthy. The launch and adoption of Reddit Max, an automated, AI-powered campaign tool, enabled advertisers to achieve a 17% reduction in cost per action and a 25% increase in conversion rate in the first quarter of 2026. About 50% of Max campaign advertisers now use AI-powered creative features, and brands like Cozy have reported a 35% higher ROAS and a 28% lower cost per acquisition with these tools.
The Case for GOOGL StockAlphabet’s leadership in AI and strong partnerships with major retailers and tech companies position the company for continued growth and further upside in the digital advertising market. In the first quarter of 2026, Google’s advertising revenues increased 15.5% year over year to $77.25 billion and accounted for 70.3% of total revenues.
A key driver behind this surge is Alphabet’s aggressive integration of advanced AI models, particularly Gemini, across its entire ads infrastructure. These AI enhancements have significantly improved ad relevance and user intent understanding, allowing Alphabet to match ads more precisely to user queries, even for longer, more complex searches that were previously difficult to monetize.
In the first quarter of 2026, the company announced that Google Maps, with AI-driven improvements, has led to a nearly 10% increase in user engagement with promoted pins, while Smart Bidding powered by Gemini has enabled advertisers to achieve greater precision and performance.
Alphabet’s partnership with Walmart remains noteworthy. In June 2026, the company partnered with Walmart Connect to integrate Walmart’s first-party shopper audiences into Display & Video 360, starting with YouTube campaigns. Advertisers can now target high-intent Walmart shoppers and measure how video ads drive online and in-store sales through closed-loop measurement, improving campaign effectiveness and return on ad spend.
Price Performance and Valuation of RDDT and GOOGLIn the year-to-date period, shares of Alphabet have gained 12.6%, whereas Reddit stock has lost 12.6%. Alphabet’s outperformance can be attributed to its continued AI push across its search, YouTube and cloud computing platforms. An expanding focus on improving the enterprise footprint is expected to boost prospects.
Despite a robust portfolio, Reddit suffers from a challenging macroeconomic environment and seasonal volatility. Stiff competition in the digital advertising market poses a significant challenge for Reddit.
RDDT and GOOGL Stock Performance
Image Source: Zacks Investment Research
Valuation-wise, RDDT and GOOGL shares are currently overvalued, as indicated by Value Scores of F and D, respectively.
In terms of the forward 12-month Price/Sales, RDDT shares are trading at 10.14X, which is higher than GOOGL’s 9.01X.
RDDT and GOOGL Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for RDDT & GOOGL?The Zacks Consensus Estimate for RDDT’s 2026 earnings is pegged at $4.83 per share, which has been unchanged over the past 30 days. This indicates an 84.35% rise year over year.
The Zacks Consensus Estimate for GOOGL’s 2026 earnings is pegged at $14.32 per share, which has increased by a couple of pennies over the past 30 days. This indicates a 32.47% year-over-year increase.
ConclusionWhile both Reddit and Alphabet stand to benefit from the booming digital advertising market, Alphabet’s AI leadership, dominant digital advertising ecosystem and stronger earnings visibility make it a stronger pick than RDDT.
Despite RDDT’s strong advertising growth and expansion of its AI-powered ad platform, its competitive pressures and higher volatility make it a riskier investment.
Currently, Alphabet has a Zacks Rank #1 (Strong Buy), making the stock a stronger pick than Reddit, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
A group of publishers and authors have filed a class action lawsuit against Google, accusing the tech giant of using their copyrighted works to train its AI platform, Gemini.
The group of plaintiffs, which includes Hachette, Cengage, Elsevier, author Scott Turow, and S.C.R.I.B.E., also alleges that Google intentionally removed or changed copyright information on these works to “conceal… that its Gemini Models were trained on stolen materials,” according to the lawsuit.
This lawsuit is just one of many complaints that publishers, authors, and other copyright holders have filed against AI companies such as Google, Meta, OpenAI, and Anthropic.
While many of these lawsuits are still pending, two early court decisions in California have favored the AI companies, ruling that the use of copyrighted works for AI training is considered “fair use” under U.S. copyright law that has not been updated since before the existence of the internet.
Anthropic was, however, fined $1.5 billion for pirating the works it trained on, marking the largest payout in the history of U.S. copyright law. Around half a million writers were eligible for payments of at least $3,000. However, many authors opted out of receiving the settlement so that they could pursue further legal action over AI training.
The California judges’ decisions don’t bode well for how other courts may view the tech companies’ fair use defense, but the conflict is too nuanced for these rulings to establish an inarguable precedent. The lawsuit against Google was filed in the U.S. District Court for the Southern District of New York, giving a different judge the opportunity to weigh in.
In the Google case, the publishers have a more nuanced, long-term relationship with the company. The lawsuit explains that publishers and authors have a long history of providing Google with copyrighted works for the specific purpose of making books searchable through Google Books. These search results do not allow users to view entire books. Instead, they provide access to short snippets of the book along with bibliographic information. The plaintiffs claim that Google trained Gemini on copies of these books, as well as books uploaded to the Google Play store, even though it never received permission to do so.
“Google illegally copied works from all these scope-limited programs for AI training, knowing it lacked authorization to do so,” the lawsuit reads.
The plaintiffs also cite an internal document from Google that allegedly states that using copyrighted books for AI training could be “highly problematic for Google” and might result in “$10Bs-$100Bs in potential fines.”
Google did not immediately respond to a request for comment.
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Amanda Silberling is a senior writer at TechCrunch covering the intersection of technology and culture. She has also written for publications like Polygon, MTV, the Kenyon Review, NPR, and Business Insider. She is the co-host of Wow If True, a podcast about internet culture, with science fiction author Isabel J. Kim. Prior to joining TechCrunch, she worked as a grassroots organizer, museum educator, and film festival coordinator. She holds a B.A. in English from the University of Pennsylvania and served as a Princeton in Asia Fellow in Laos.
You can contact or verify outreach from Amanda by emailing [email protected] or via encrypted message at @amanda.100 on Signal.
When you think about Berkshire Hathaway (BRKA 0.18%) (BRKB 0.38%), it's nearly impossible not to recall the long stewardship of Warren Buffett, the legendary investor who led the conglomerate for six decades. Buffett was famed for his buy-and-hold value investing style, taking large positions in blue chip companies like Bank of America, Coca-Cola, and American Express.
Now that Buffett is in his well-earned retirement, Berkshire has new leadership under Greg Abel. And the CEO has wasted no time shaking things up, closing 16 positions in Berkshire's portfolio and trimming the number of companies Berkshire invests in to 29. He also loaded up on Alphabet (GOOG +0.70%) (GOOGL +0.83%), buying 36.4 million shares in the first quarter, and then signing off on a private placement to buy another $10 billion worth of shares.
Nearly 30% of Berkshire's legendary value-oriented portfolio is now tied up in two artificial intelligence stocks: Alphabet and Apple (AAPL 1.33%). And while a 30% allocation to two AI stocks may seem aggressive -- especially for a company like Berkshire Hathaway -- its portfolio is actually more balanced than it has been in years.
Here's why.
Image source: Getty Images.
Berkshire's history with AI stocks It wasn't long ago that Berkshire Hathaway's portfolio was heavily overweighted with Apple. In mid-2023, Berkshire held 914,560,382 shares of Apple stock, accounting for about half of the company's total investment portfolio. But Buffett and Berkshire Hathaway started trimming the company's stake. "I'm very happy to have it be our largest holding," Buffett said in a 2026 interview with CNBC. "I was not happy to have it be as large as almost everything else combined."
Today, Berkshire still holds a sizable position in Apple, accounting for 20.6% of its $348.2 billion investment portfolio. Apple is still the largest holding, although it's not as outsize as it used to be. And Alphabet has cracked the top five, with its Class A shares accounting for 7% of Berkshire's portfolio and Class C shares totaling 1.8%.
Berkshire Hathaway's Top 5 Holdings
Number of Shares
Percentage of Berkshire Portfolio
Apple
227,917,808
20.6%
American Express
151,610,000
15.3%
Coca-Cola
400,000,000
9.6%
Alphabet
66,406,793 (combined Class A and Class C shares)
8.8%
Bank of America
513,624,165
8.8%
Data source: CNBC.
Diversification matters It's important to understand that Berkshire isn't giving up on AI stocks -- it's redeploying capital from Apple and positioning its closed positions in Alphabet. Rather than making just one sizable bet on a top AI stock, Abel has Berkshire significantly invested in two AI stocks. And they come with very different revenue streams.
Apple makes most of its money from hardware, including its iPhone, Mac computers, iPad, and wearables. And its Services segment, which includes the Apple App Store, is a serious money-maker, generating about $31 billion in revenue in the most recent quarter and gross margins of 76%.
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Meanwhile, Alphabet has a powerful internet-based advertising engine that generated $77.25 billion in revenue in the first quarter, and a fast-growing cloud computing division that contributed $20 billion in revenue and jumped 63% year over year.
A 30% weighting in two top AI stocks is much better than a 50% weighting in one. Berkshire's portfolio remains heavily invested in AI, but is less dependent on the success of a single company.
American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.
The chief of Google's AI division has called for the U.S. to spearhead a standards body that will oversee new AI models and assess national security risks including cybersecurity and biological threats.
Google DeepMind boss Demis Hassabis, a Nobel laureate, said in an article posted on X on Tuesday that "urgent action" was needed to address risks associated with artificial general intelligence (AGI) — the point at which AI matches or surpasses human intelligence.
"We've already seen the challenges frontier models pose for cybersecurity, and other threats including nuclear and bio risks may soon emerge as capabilities continue to advance," he said.
Hassabis proposed a U.S.-led public-private partnership overseen by the federal government as a solution to helping tackle these threats. The White House, the State Department and the Department of Commerce have been approached for comment.
The comments come a month on from sources telling CNBC that Hassabis, alongside Anthropic CEO Dario Amodei, called for a U.S.-led coalition to shape rules and standards around AI at a G7 meeting with tech leaders and heads of state that included President Donald Trump. OpenAI's Sam Altman also called for a similar body in an article published by the Financial Times earlier this month.
AI standards bodyDespite growing calls among industry leaders for an AI watchdog, the regulation of leading AI models has increasingly been a point of contention between public and private sectors.
In recent weeks, Anthropic was locked in negotiations with officials after the Trump administration temporarily imposed export controls over an advanced model. OpenAI also faced restrictions as it was initially requested by the U.S. government to limit the rollout of a new model.
Hassabis said the U.S. was well positioned to lead in developing an AI framework "given its economic and technical standing."
"It could establish a new Standards Body modelled on a federally overseen public-private partnership or self-regulatory organisation, much like the Financial Industry Regulatory Authority (FINRA), with a board that includes independent leading technical experts and open-source representatives," he added. FINRA regulates brokerage firms and exchange markets in the U.S.
The proposed body would need "substantial" funding "in order to attract world-class technical talent and provide the necessary compute resources for large-scale testing," Hassabis said. Funding would "likely" come from industry, he added.
Frontier labs would initially voluntarily share models with the body for review up to 30 days before release, before becoming mandatory for deployment in the U.S. market after being shown to be "effective."
"Specific agentic AI tests could look for attempts to bypass safety guardrails or signs of deception, and ensure best practices, such as digitally watermarking AI-generated images and generating human-readable output tokens to understand model reasoning," Hassabis said.
U.S. vs ChinaCalls for greater regulatory oversight come as the race between the U.S. and China to develop and deploy AI models heats up.
Recent model releases from Chinese companies, including DeepSeek and Z.ai, are seen by many as highly competitive compared to leading frontier systems from the likes of Anthropic and OpenAI, and are gaining traction among U.S. companies as AI costs rise.
As a result, U.S. lawmakers are currently considering how to curb the growing adoption of Chinese AI models by homegrown companies, which the State Department told CNBC raises "serious concerns."
I keep hitting the buy button on Alphabet (NASDAQ:GOOG | GOOG Price Prediction), and every quarter hands me a fresh reason to do it again. This is the position I plan to hold for the next decade, and the case gets stronger with each earnings report.
The reason is simple: Google is running the AI stack from silicon to search, and the numbers are showing up in the financials before they show up in the price.
The Compounding Machine I Keep Feeding Start with Cloud. Google Cloud revenue grew 63% in Q1 FY2026 to $20.03B, and the backlog nearly doubled quarter over quarter to over $460 billion. That is contracted future revenue, already on the books. Search kept rolling with 19% growth and queries at all-time highs. YouTube ads posted $9.88B. Paid subscriptions across YouTube Premium and Google One reached 350 million.
The earnings pattern behind the price is what keeps me buying. Q1 FY2026 EPS came in at $5.11 against a $2.63 estimate, the fourth straight quarter of beating expectations.
Operating income grew 30% year over year to $39.70B, and operating margin expanded to 36.1%. Full-year FY2025 annual revenues exceeded $400 billion for the first time. Sundar Pichai summed up the tone: “2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business.”
Why This One and Not the Obvious Alternatives When people talk mega-cap AI, they reach first for Microsoft (NASDAQ:MSFT) or Amazon (NASDAQ:AMZN). I get the reflex. What keeps my capital going into Alphabet is the combination of price and pace. Alphabet trades at a forward P/E of 25 against TTM EPS of $13.1, with return on equity of 38.9%.
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On the Cloud side, one investor podcast I follow put it plainly: “Google is significantly outgrowing Amazon in the cloud space because they made an early bet on courting AI companies.” Cloud growth at 63% year over year is doing that work in the numbers.
The analyst desk lines up behind it: 14 strong buys, 44 buys, 7 holds, zero sells, with a consensus target of $428.54. The stock currently sits 6% below its 52-week high after running 93.96% in the past year and 882.93% over the past ten years.
The Risk I Own With Open Eyes The real risk is capital expenditure. Q1 CapEx more than doubled to $35.67B, up 107.44% year over year, and management guided $175B to $185B in CapEx for FY2026. Free cash flow fell 46.63% in the quarter. That is a real drawdown on the cash machine, and I think about it every time I add to the position.
The reason it has not changed my thesis: operating cash flow still grew 26.67% to $45.79B, shareholders equity sits at $478.75B, and Alphabet raised its quarterly dividend 5% to $0.22 per share during the heaviest investment period in its history. Google is spending because a $460 billion Cloud backlog is asking it to.
The Buy Button Stays Active I own Alphabet because the moat, the growth engine, and the balance sheet all point the same direction, and I plan to still own it in July 2036 for the same reason I bought more of it this week.
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Alphabet's Q2 earnings will likely normalize after a massive Q1 beat, shifting investor focus toward its growing in-house semiconductor operations. Hyperscalers are beginning to position their proprietary custom silicon segments as formidable standalone businesses to combat heavy cloud competition. While massive capital expenditures create depreciation risks for GAAP earnings, this infrastructure buildout should ultimately spur lucrative proprietary chip sales.
A specially designed Google logo, during the opening of Google's new Artificial Intelligence (AI) centre in Berlin, Germany, March 5, 2026. REUTERS/Annegret Hilse/File Photo Purchase Licensing Rights, opens new tab
CompaniesBERLIN, July 14 (Reuters) - Germany's media regulator said on Tuesday that Google's AI Overviews and Perplexity AI are subject to the country's media laws, stepping up scrutiny of AI-generated content after a German court found Google liable for inaccurate information produced by the feature.
The Commission for Licensing and Supervision, ZAK, which represents Germany's 14 state media authorities, said AI-generated news summaries and chatbot responses constitute content created by the providers themselves rather than merely displaying third-party material.
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The ruling follows increased scrutiny of AI-generated search summaries in Germany and elsewhere in Europe.
In a separate case, a court in Munich held that Google could be directly liable for allegedly false statements generated by its AI Overview feature, finding that AI-produced summaries amounted to the company's own content rather than a mere display of third-party information, according to German newspaper publishers' association BDZV.
"AI search engines and chatbots are content providers, and we will consistently apply German media law to them from now on," ZAK Chairman Thorsten Schmiege said in a statement.
The regulator said the liability exemption under the European Union's Digital Services Act, which generally shields platforms from responsibility for illegal user-generated content, did not apply in these cases.
According to the regulator, Google's AI Overviews are displayed prominently within search results, making traditional lists of links less visible and thereby unfairly disadvantaging third-party media content.
It also argued that chatbots such as Perplexity influence the discoverability of news content when they select and present sources, links or recommendations alongside AI-generated answers.
Such services could therefore qualify as media intermediaries and be subject to rules designed to safeguard media plurality.
Google said it planned to appeal the decision, which a spokesperson said "fails to recognise how people's preferences when searching for information and the information ecosystem are changing."
"Our AI-powered summaries enhance the search experience in Germany - they help users discover new content and ask follow-up questions," the spokesperson said.
Perplexity declined to comment on the decision but said it complies with the EU's privacy rules, or GDPR, and holds SOC 2 Type II security and privacy certification.
Reporting by Klaus Lauer, Writing by Friederike Heine, Editing by Louise Heavens
Our Standards: The Thomson Reuters Trust Principles., opens new tab
The stock market has been on fire since the bear market ended in October 2022, with the "Magnificent Seven" leading the charge. Although Nvidia is Wall Street's largest publicly traded company, it's Google parent Alphabet (GOOGL 1.23%)(GOOG 1.16%) that's outperformed of late.
While Alphabet is best known for its globally dominant internet search engine, Google, as well as its burgeoning cloud infrastructure services platform, Google Cloud, there's another mammoth investment that's been powering its stock higher over the last decade. However, Alphabet recently abandoned this decade-long, $346 billion investment to pursue its artificial intelligence (AI) ambitions. Based on what history tells us, Alphabet going all-in on AI is a mixed bag.
Image source: Getty Images.
Alphabet bids adieu to a steady $346 billion investment Although Alphabet has established itself as one of Wall Street's premier money managers, one of the most impressive investments it's made is in itself. Between Jan. 1, 2016, and Dec. 31, 2025, Alphabet spent approximately $346 billion to repurchase shares of its stock:
2016: $3.693 billion in full-year buybacks 2017: $4.846 billion 2018: $9.075 billion 2019: $18.396 billion 2020: $31.149 billion 2021: $50.274 billion 2022: $59.296 billion 2023: $61.504 billion 2024: $62.222 billion 2025: $45.709 billion The sizable uptick in buybacks that began in 2018 is a direct result of President Donald Trump's Tax Cuts and Jobs Act, which permanently lowered the peak marginal corporate income tax rate from 35% to 21%. Enabling businesses to retain more of their income allowed them to repurchase their shares.
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For companies with steady or growing net income, share buybacks can also increase earnings per share and make a company's stock more fundamentally attractive to value-focused investors.
But on June 1, Alphabet officially squashed its $346 billion investment by announcing an $80 billion equity offering (which was subsequently raised to $84.75 billion). This offering, $10 billion of which went to Berkshire Hathaway in a private placement, is to be used to expand Alphabet's AI infrastructure.
Image source: Getty Images.
Alphabet is going all-in on AI, and history suggests it'll be a bumpy ride Although Alphabet retains its strong cyclical advertising ties via Google and streaming platform YouTube, its jaw-dropping capital expenditures on AI, which are offsetting years of buybacks, are likely to be a mixed bag.
When peering five or more years into the future, this has all the hallmarks of a slam-dunk investment. Since Alphabet began integrating generative AI and large language model solutions into Google Cloud, sales in this high-margin segment have reaccelerated in a big way. In the March-ended quarter, Google Cloud revenue soared 63% from the year-ago period, with annual run rate sales topping $80 billion.
Over time, Google Cloud can overtake ads as Alphabet's primary cash-flow driver.
"Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion."
-- Qualtrim (@qualtrim) April 29, 2026 On the other hand, every game-changing technology since (and including) the dawn of the internet has endured a bubble-bursting event early in its expansion. Regardless of how impressive early adoption of a new technology is, optimization takes time. It'll likely be years before businesses are optimizing AI solutions to boost sales and profits.
If an AI bubble forms and bursts, which history clearly points to, Alphabet wouldn't be immune. Thankfully, its competitive moat and cash-rich balance sheet would allow it to weather the storm better than most AI-focused companies.
From Search Giant to AI-First Platform When Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) handed Sundar Pichai the Google CEO job on August 10, 2015, the company was still fundamentally a search-and-advertising business dressed up in moonshot ambition. Weeks later came the Alphabet holding-company restructuring, and by December 3, 2019, Pichai took the parent CEO role from Larry Page.
The decade since has been a controlled pivot. Pichai reoriented Google around AI, poured capital into TPUs and DeepMind, scaled YouTube into a $60 billion-plus annual business, and built Google Cloud from a rounding error into a segment now running at over $80 billion annually. Gemini shipped, the Gemini App crossed 750 million monthly active users, and Waymo passed 500,000 fully autonomous rides a week. In 2024, Alphabet even initiated its first dividend, a symbolic shift toward mature capital allocation. The overhang: antitrust cases, a $3.5 billion EU fine, and a jaw-dropping $180 billion to $190 billion capital spending plan for the current year. A $10,000 stake made the day Pichai became Google CEO has compounded aggressively.
A Pichai-Era 10-Bagger Here is how it stacks against the S&P 500 across standard windows and the full Pichai era.
Alphabet S&P 500 1-Year Return 96.19% 20.13% 5-Year Return 177.34% 71.73% 10-Year Return 866.94% 247.11% Pichai Era 972.64% 255.68% That original $10,000 is now worth roughly 11 times its cost basis, versus roughly 3.5 times in an index fund. Holding required nerve: the stock spent much of 2025 below $200 before ripping to $408 at the 52-week high.
Our grade for Pichai: A minus. He missed the ChatGPT moment early but shipped Gemini, defended Search, and built a real cloud business. Regulatory losses and capex risk keep it from being an A+.
The Succession Question Pichai has now run Google for over a decade and Alphabet for more than six years. If the AI capex bet strains free cash flow (Q1 free cash flow fell to $10.12 billion, down 46.63% year over year), founder involvement from Page and Brin could intensify, and a technical successor from the DeepMind or Cloud ranks becomes conceivable. However, nothing has been announced. Investors should treat any leadership chatter as noise unless the board signals otherwise.
The Bull and Bear Case, With Caveats The bull case rests on whether investors believe the $460 billion Cloud backlog and Gemini’s 16 billion tokens per minute in API throughput translate to durable operating leverage. At a forward P/E of 25 with 82% earnings growth and largely bullish analyst sentiment, the setup looks reasonable. The bear case rests on AI search cannibalizing ad economics or $180 billion-plus in annual capex never earning its cost of capital. On balance, the setup skews constructive, though scaling in is more prudent than chasing the recent breakout.
Switzerland's Competition Commission (COMCO) has launched a preliminary investigation into Google's removal of a feature that allows mobile phone users to opt out of using its search engine as default, the authority said on Tuesday.
Alphabet Inc. is resilient due to its integrated hardware/software AI stack, but valuation is elevated at current levels. Cloud backlog stands at $462 billion, with significant customer concentration risk from Anthropic and a need to monitor backlog conversion rates. Capex is surging, with 2026 guidance at $185 billion and risks if spending outpaces monetization, especially into 2027-2028.
In the latest trading session, Alphabet (GOOGL - Free Report) closed at $352.51, marking a -1.31% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.79%. Elsewhere, the Dow saw a downswing of 0.26%, while the tech-heavy Nasdaq depreciated by 1.55%.
The stock of internet search leader has fallen by 0.7% in the past month, lagging the Computer and Technology sector's gain of 3.44% and the S&P 500's gain of 4.28%.
The investment community will be closely monitoring the performance of Alphabet in its forthcoming earnings report. The company is scheduled to release its earnings on July 22, 2026. The company is forecasted to report an EPS of $2.86, showcasing a 23.81% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $101.22 billion, indicating a 23.86% upward movement from the same quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $14.32 per share and a revenue of $423.63 billion, indicating changes of +32.47% and +23.54%, respectively, from the former year.
Investors should also note any recent changes to analyst estimates for Alphabet. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.14% higher. Alphabet currently has a Zacks Rank of #2 (Buy).
With respect to valuation, Alphabet is currently being traded at a Forward P/E ratio of 24.94. This signifies a premium in comparison to the average Forward P/E of 17.4 for its industry.
Meanwhile, GOOGL's PEG ratio is currently 1.53. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Services was holding an average PEG ratio of 1.66 at yesterday's closing price.
The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 104, placing it within the top 43% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
Google maintained steady user and traffic growth in June while rivals Claude and Gemini extended sharp gains, according to a new note from Bank of America.
BofA reiterated its Buy rating on Alphabet Inc (NASDAQ:GOOG), pointing to comments from Google executives describing an "expansionary moment" for Search that could support continued strength into 2026.
Global daily active users on Google's app rose 1% month-over-month to 2.2 billion in June, per Sensor Tower data cited in the note. ChatGPT held flat at 440 million daily users, while Gemini climbed 7% to 118 million and Claude gained 9% to 18 million.
Gemini added 8 million daily users during the month, more than any other AI app tracked, followed by ChatGPT and Claude, which each added 2 million. Meta AI lost about 200,000 daily users over the same period.
Web traffic data from Similarweb showed a similar pattern. Global daily visits to Google were up 4% year-over-year to 2.8 billion in June, while ChatGPT's web traffic was flat year-over-year at 179 million visits. Gemini's web visits surged 341% year-over-year and Claude's rose 736%, though both remain far smaller in absolute terms than Google or ChatGPT. Meta AI's web visits rose 98% year-over-year.
In the US specifically, Google web visits rose 3% year-over-year to 535 million, while ChatGPT's US visits climbed 19% year-over-year to 31 million, equivalent to roughly 6% of Google's US traffic.
Search market share data from Statcounter showed Google's global share up 79 basis points month-over-month and 171 basis points year-over-year, reaching 91.3%. Bing's global share ticked up 30 basis points month-over-month to 4.7%. In the US, Google's search share rose 86 basis points month-over-month to 86.7%.
BofA said the combination of stable Google traffic and strong ecommerce volumes in the second quarter points to potential upside to Street estimates for Search. The bank flagged new AI-driven ad formats and agentic search features announced at Google's I/O conference, along with broader rollout of Gemini 3.5 Pro, as potential catalysts. Risks cited included Alphabet's relatively elevated valuation compared with its recent history, OpenAI's advertising ramp, and emerging competition from new models.
Alphabet Inc. (GOOG - Free Report) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.
The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.
Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.
Therefore, the Zacks rating upgrade for Alphabet basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.
Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Alphabet imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harnessing the Power of Earnings Estimate RevisionsEmpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for AlphabetFor the fiscal year ending December 2026, this company is expected to earn $14.32 per share, which is unchanged compared with the year-ago reported number.
Analysts have been steadily raising their estimates for Alphabet. Over the past three months, the Zacks Consensus Estimate for the company has increased 24%.
Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Alphabet to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
Alphabet (NASDAQ:GOOG | GOOG Price Prediction) and Broadcom (NASDAQ:AVGO) both delivered blockbuster AI quarters, but the results hide a widening strategic gap. Alphabet is a hyperscaler feeding its own custom chips into a $460 billion cloud backlog. Broadcom is the merchant silicon supplier riding that same wave. Same AI supercycle. Very different positions in the value chain.
TPUs Feed the Cloud. Broadcom Sells the Picks and Shovels. Google’s Q1 FY2026 landed with EPS of $5.11 against a $2.63 consensus, a fourth straight beat, on revenue of $109.90 billion (+21.8% YoY). Google Cloud was the star at $20.03 billion (+63% YoY), with Sundar Pichai noting Gemini is now “processing more than 16 billion tokens per minute via direct API use”. CapEx more than doubled to $35.67 billion, with 2026 guidance calling for $175 to $185 billion. That spend flows straight into Google’s own TPU stack.
Broadcom’s Q2 FY2026 was strong. EPS of $2.44 beat by 1.79%, and AI semiconductor revenue jumped to $10.80 billion, up 143% YoY. Hock Tan guided Q3 AI revenue to $16.0 billion, over 200% YoY. The catch: that growth depends on a handful of hyperscalers, and one of them, Google, is a customer aggressively vertical integrating.
Hyperscaler Kingpin vs. Silicon Middleman Alphabet bypasses the hardware margin squeeze entirely. It designs TPUs, monetizes them through Cloud, and layers a sovereign Gemini ecosystem on top. Multi-gigawatt compute deals with Anthropic plug directly into that stack. Broadcom sells accelerators and Ethernet switches into the same customers but faces rising foundry costs and a crowded custom ASIC field with Marvell competing for socket wins.
Lens GOOG AVGO Forward P/E 25x 20x Trailing P/E 27x 60x YTD Return +13.65% +4.53% 1-Month -0.56% -25.03% The valuation asymmetry is stark. Google trades cheaper on forward earnings than a fabless chipmaker with severe customer concentration risk. AVGO shed roughly a quarter of its value in the last month, and founder Henry Samueli unloaded over 1 million shares on June 24 alone. That is not typical rebalancing.
The Anthropic Compute Race Decides Who Pulls Ahead Watch Google Cloud’s backlog conversion, Gemini Enterprise’s 40% QoQ growth in paid MAUs, and whether TPU capacity keeps absorbing internal AI workloads. For Broadcom, keep an eye on whether the $16 billion Q3 AI target holds if any hyperscaler pulls back custom ASIC orders in favor of in-house silicon.
Why I’d Take the Vertical Stack Over the Silicon Middleman I lean toward Google. Owning the chips, the cloud, the models, and the distribution surface gives it pricing control that a merchant chipmaker cannot replicate. At 25x forward earnings with a $426.62 analyst target, the risk-reward looks cleaner than paying 60x trailing for AVGO’s exposure to the same customers Google is quietly disintermediating. For me, the hyperscaler kingpin monetizing its own chips end-to-end is the better place to sit in 2026.
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Alphabet (NASDAQ:GOOG | GOOG Price Prediction) told investors on its Q1 2026 earnings call that it now expects to spend $180 billion to $190 billion on capital expenditures this year, raised from a prior range of $175 billion to $185 billion. That is guidance, not a reported result. Management also said 2027 CapEx will “significantly increase compared to 2026.”
The company that built a nearly $2 trillion valuation on high-margin advertising is now pouring an ad-industry’s worth of cash into AI infrastructure every twelve months. If the company can grow its overall advertising revenue toward the $1 trillion level as many think is possible, this is a stock that’s trading at a relatively cheap level, though the jury remains out on this front.
What It Means Alphabet spent $35.67 billion on capex in a single quarter, more than double the year-ago figure. As a result, free cash flow unsurprisingly fell to $10.116 billion, down 46.63% year over year.
For a business that historically converted ad dollars into cash at industry-leading rates, that swing is the story behind the story. The bull rebuttal is that ads are still growing. That’s evidenced by Search and Other revenue climbed 19% to $60.4 billion, and consolidated revenue reached $109.9 billion, up 22%.
That said, I do think the overall revenue and earnings growth mix supporting the company’s fundamentals may be fraying. Google Network advertising fell 4% to roughly $7 billion. YouTube ad growth cooled to 11%. And CEO Sundar Pichai acknowledged the company is “compute constrained in the near term“, adding that “cloud revenue would have been higher if you were able to meet the demand.” The ad monopoly is funding an infrastructure war it did not choose.
Market Reaction Shares are up 13.65% year to date, closing at $356.18 on July 2, 2026, from $313.39 to end 2025. Over one year the stock has risen 98.71%. However, momentum has stalled recently, with a one-month stock price change of -0.56%, and Reddit chatter in late June was dominated by a post asking “Why did GOOG stock fall so much?” that drew 335 upvotes and 338 comments in r/investing.
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Bear Case Three data points define the risk. First, the ad engine is uneven. Google Network revenue fell from $7,256 million to $6,971 million year over year, and YouTube’s 11% growth is a step down from the pace investors have priced in.
Second, the cash cost of defending Search is exploding. Free cash flow at $10.116 billion against Q1 capex of $35.67 billion is a compression the ad business has never had to absorb. Chief Business Officer Philipp Schindler flagged upside from Gemini raising ad coverage above the historical 20% of queries, but that upside is the assumption, not the reported outcome.
Third, sentiment is fragile at the top of the AI food chain. Reddit sentiment cratered to 39 (bearish) on June 23 after the departure of AI researchers to competitors, including Gemini co-lead Noam Shazeer to IPO-bound OpenAI. Prediction markets on Polymarket give Alphabet only a 15.5% probability of finishing 2026 as the largest company in the world by market cap, and only a 5.3% probability of holding that spot on July 31, 2026.
Vanguard’s 2026 outlook, meanwhile, warns of the “typical underestimation of creative destruction from new entrants into the sector, which erodes aggregate profitability” in tech-heavy growth stocks. Alphabet earned $132.17 billion in 2025 net income on $402.96 billion in revenue. Defending that base against generative AI substitution now costs a rising share of it.
Bottom Line Long-term holders should watch two lines: -Google Network’s return to growth (or a second quarter of decline), and free cash flow, which cannot stay near $10 billion a quarter if capex heads toward $190 billion annually and beyond in 2027. Alphabet raised its dividend 5% to $0.22 per share and paid on June 15, 2026, so shareholders are still getting a raise. They are also underwriting the largest infrastructure buildout in the company’s history to protect an ad franchise that is starting to show hairline cracks.
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Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Alphabet (GOOGL - Free Report) Alphabet is one of the most innovative companies in the modern technological age. Over the last few years, the company has evolved from primarily a search-engine provider to cloud computing, ad-based video and music streaming, autonomous vehicles, healthcare and others. In the online search arena, Google has a monopoly with roughly 90% of the online search volume and market. Over the years, the company has witnessed increase in search queries, resulting from ongoing growth in user adoption and usage, primarily on mobile devices, continued growth in advertiser activity, and improvements in ad formats.
GOOGL is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. GOOGL has a Growth Style Score of B, forecasting year-over-year earnings growth of 32.5% for the current fiscal year.
For fiscal 2026, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.03 to $14.32 per share. GOOGL boasts an average earnings surprise of +34.4%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, GOOGL should be on investors' short list.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Alphabet (GOOGL - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this internet search leader have returned -0.7%, compared to the Zacks S&P 500 composite's +4.3% change. During this period, the Zacks Internet - Services industry, which Alphabet falls in, has gained 0.9%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Alphabet is expected to post earnings of $2.86 per share, indicating a change of +23.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.
The consensus earnings estimate of $14.32 for the current fiscal year indicates a year-over-year change of +32.5%. This estimate has changed +0.1% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $14.85 indicates a change of +3.7% from what Alphabet is expected to report a year ago. Over the past month, the estimate has changed +0.7%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Alphabet is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Alphabet, the consensus sales estimate for the current quarter of $101.22 billion indicates a year-over-year change of +23.9%. For the current and next fiscal years, $423.63 billion and $518.5 billion estimates indicate +23.5% and +22.4% changes, respectively.
Last Reported Results and Surprise HistoryAlphabet reported revenues of $94.67 billion in the last reported quarter, representing a year-over-year change of +23.8%. EPS of $5.11 for the same period compares with $2.81 a year ago.
Compared to the Zacks Consensus Estimate of $92.22 billion, the reported revenues represent a surprise of +2.65%. The EPS surprise was +93.56%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Alphabet is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Alphabet. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Alphabet Inc. (GOOG - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this company have returned -0.9% over the past month versus the Zacks S&P 500 composite's +4.3% change. The Zacks Internet - Services industry, to which Alphabet belongs, has gained 0.9% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Alphabet is expected to post earnings of $2.86 per share for the current quarter, representing a year-over-year change of +23.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
For the current fiscal year, the consensus earnings estimate of $14.32 points to a change of +32.5% from the prior year. Over the last 30 days, this estimate has changed +0.1%.
For the next fiscal year, the consensus earnings estimate of $14.85 indicates a change of +3.7% from what Alphabet is expected to report a year ago. Over the past month, the estimate has changed +0.7%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Alphabet.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Alphabet, the consensus sales estimate of $101.22 billion for the current quarter points to a year-over-year change of +23.9%. The $423.63 billion and $518.5 billion estimates for the current and next fiscal years indicate changes of +23.5% and +22.4%, respectively.
Last Reported Results and Surprise HistoryAlphabet reported revenues of $94.67 billion in the last reported quarter, representing a year-over-year change of +23.8%. EPS of $5.11 for the same period compares with $2.81 a year ago.
Compared to the Zacks Consensus Estimate of $92.22 billion, the reported revenues represent a surprise of +2.65%. The EPS surprise was +93.56%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Alphabet is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Alphabet. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
New Berkshire Hathaway Chief Executive Officer Greg Abel appears to have chosen his favorite stock early in his tenure.
Since Abel took over for Warren Buffett as the new chief of Berkshire Hathaway, the company has plowed more than $20 billion into Alphabet (GOOG 0.29%) (GOOGL 0.50%) through open-market purchases and direct equity offerings.
Alphabet, the parent company of Google, is now the fourth-largest position in Berkshire's portfolio when combining both Class A and Class B shares it owns.
Abel appears to have chosen his horse early. Does Alphabet achieve the Rule of 40?
Image source: Alphabet.
What is the rule of 40? There are many financial metrics that investors use to assess the health and future prospects of a stock, and one is the Rule of 40. The Rule of 40 is used by investors to assess how well a company balances growth and profitability and is frequently applied to software companies.
The formula looks at revenue growth, typically on a year-over-year basis, combined with net profit margin. If the total is above 40%, then a company has done a good job of growing profitably. If it's below 40%, the company may not be investing efficiently.
Companies that do achieve the Rule of 40 can receive higher valuations. It's also important to note that investors don't have to use net profit margin. They can use operating margin, free-cash-flow margin, or EBITDA (earnings before interest, taxes, depreciation, and amortization) margin.
How Alphabet performs We can assess Alphabet's performance using the Rule of 40, based on profit margin, operating margin, and free-cash-flow margin.
I looked at Alphabet's year-over-year revenue growth on a constant-currency basis and reviewed all metrics for the full year 2025 and the first quarter of 2026 to assess both the most recent numbers and the 12-month performance. The large conglomerate generated 15% annual revenue growth in 2025 and 19% in the first quarter of 2026.
Rule of 4020251Q26Operating margin47%55%Profit margin48%76%Free-cash-flow margin33%28% Data source: Alphabet.
As you can see, when it comes to operating margin and profit margin, Alphabet passed the Rule of 40 with flying colors. Artificial intelligence (AI) has been a huge boon to companies like Alphabet, with their cloud businesses benefiting immensely.
Alphabet has also rolled out its own large language models (LLMs), which many investors believe are competitive with perceived leaders like Anthropic's Claude and OpenAI's ChatGPT.
The area where Alphabet has struggled is when using free-cash-flow margin in the Rule of 40. Perhaps even more concerning is that this metric declined in the first quarter of 2026.
This actually makes sense, given Alphabet's capital expenditures (capex) and the company's capex forecast as it continues to build out AI infrastructure. Alphabet has projected between $180 billion and $190 billion in capex this year.
Today's Change
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Some Wall Street analysts even foresee the company's free cash flow turning negative during the next few years.
Just one data point Investors should understand that many financial metrics are used to evaluate a company's health. You should never lean too heavily on any individual metric as the basis for an investment; instead, use the sum of your research to inform your decision-making.
In this case, the Rule of 40 indicates that Alphabet's AI initiatives and investments have so far paid dividends. But the struggles with free-cash-flow margin also indicate the company may be overspending on AI, a concern that many investors have with other AI hyperscalers, too.
Many investors, including Abel, likely expect the investments to pay off, but if you also start to see Alphabet struggle with the Rule of 40 when using operating and profit margins in the formula, that would be a major red flag about these AI infrastructure investments.
Artificial intelligence has become one of the technology industry’s biggest battlegrounds, but the debate is no longer just about which model performs best. Increasingly, it is about who controls the future of AI itself.
Open-source advocates argue that freely available models will democratize AI, lower costs, and prevent a handful of companies from dominating the market. Yet the dollars flowing through enterprise AI tell a different story. As businesses ramp up spending, the biggest winners continue to be the companies selling proprietary models.
For investors, that’s the trend worth watching because spending, not downloads, ultimately determines who captures the profits.
Enterprise Spending Tells A Different Story On the All-In podcast, David Sacks challenged the popular narrative that open-source AI is winning. His argument was simple: ignore GitHub stars, Hugging Face downloads, and social media buzz. Follow where enterprises are writing checks.
According to the latest a16z CIO survey of 100 verified Global 2000 technology executives, open-source AI accounted for 19% of enterprise AI spending last year. This year, that figure has fallen to 11%. Closed models moved in the opposite direction, climbing from 81% to 89% of enterprise spending.
The same survey found enterprise preferences steadily shifting toward proprietary platforms. In January 2026:
Metric January 2026 Prefer closed-source models 36% Prefer open-source models 30% Average annual LLM spending $7 million Average spending two years ago $4.5 million Expected spending increase in 2026 65% That growing budget is flowing primarily to OpenAI, Anthropic, and Alphabet‘s (NASDAQ:GOOG | GOOG Price Prediction) Google.
To put that into perspective, enterprises aren’t reducing AI investments. They’re increasing them. The question is simply where the money is going, and the answer is increasingly toward closed providers.
That may be true for experimentation, internal utilities, or batch processing. The problem is equating cheap volume with valuable work.
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Sacks argues enterprises continue relying on closed models for production systems where reliability matters most. Those applications often involve AI agents maintaining conversation history, long context windows, company-specific knowledge, and custom API integrations. Once those systems are deployed, replacing them becomes expensive and risky.
Ironically, the very features enterprises want from open source — vendor independence, portability, and data sovereignty — become harder to achieve after they’ve built workflows around proprietary models.
Those production workloads also tend to consume more tokens per task because they involve repeated interactions, larger context windows, and more sophisticated reasoning. While there is no public evidence that open-source models dominate total token usage, there is even less evidence they dominate the highest-value AI work.
The Lock-In Effect Is Becoming AI’s Moat Perhaps the most important insight from Sacks wasn’t about market share but switching costs.
Software history shows businesses rarely migrate away from platforms deeply embedded in daily operations. AI appears to be following the same pattern. As enterprise LLM spending has risen from $4.5 million to $7 million over two years, companies are investing in agents, workflows, and integrations built around proprietary APIs. Those investments create operational inertia that favors incumbents.
That doesn’t mean open source disappears. It will likely remain the preferred choice for developers, research, experimentation, and cost-sensitive deployments. But the highest-value enterprise workloads increasingly belong to companies offering frontier performance and enterprise-grade support.
Key Takeaway In short, popularity and profitability are becoming two different conversations. Open-source AI may generate millions of downloads and plenty of experimentation, but the a16z CIO survey suggests enterprises continue directing 89% of their AI budgets toward closed models. Cheaper tokens can drive volume, but they don’t automatically translate into the most valuable workloads.
Ultimately, investors should watch where enterprise dollars are accumulating because history shows the companies capturing spending, not attention, usually create the most lasting shareholder value.
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When Mark Zuckerberg walked into a Los Angeles courtroom on 18 February flanked by an entourage bedecked in Meta Ray-Bans, some people laughed. If this was an attempt at product placement for the company’s newest range of smart glasses, it was jarringly ill-judged: Zuckerberg was about to testify before a jury in a landmark lawsuit that sought to prove that Instagram and YouTube are addictive by design, and he had passed a throng of bereaved parents on his way into the courthouse. But the prosecution team, led by Mark Lanier, were not laughing.
This was a serious trial. For the first time, the most powerful names in social media were being held to account for the inherent design of their platforms, rather than the content hosted on them. They were accused of deliberately and maliciously building products that keep children hooked, with disastrous consequences for the mental wellbeing of young people. It was a landmark case – a big tobacco moment for big tech.
But there were specific reasons why the prosecution was deeply disturbed to see Meta Ray-Bans in court. “We had fought hard for an anonymous jury. We didn’t want the names disclosed in a way where Google could go pull up their Gmails, where Meta could go pull up their Facebook accounts,” Lanier tells me in his warm Texas drawl. “Then Zuckerberg shows up with security guards wearing Meta glasses. They can easily do facial identification and figure out exactly who the jurors are.” This was not product placement, Lanier says – it was the deployment of the most relentless form of digital surveillance the world has ever known.
The prosecution appealed to the judge, pointing out that Zuckerberg’s entourage was breaking rules that forbade cameras in the courtroom. “The judge made them swear that they hadn’t taken any pictures.” Lanier says. “And then they took the glasses off.”
The case of KGM v Meta et al was always going to be as hi-tech as it was high stakes. KGM – also known by her first name, Kaley – claimed that an addiction to social media that had begun with YouTube at age six and Instagram at age nine had caused her to develop body dysmorphia, anxiety and depression. (Snapchat and TikTok, named in Kaley’s original complaint, had settled out of court for an undisclosed sum before the trial began.) Lanier’s team had to convince the jury that Meta and Google had engineered their products to be addictive. It was a test case that could blaze a trail for thousands more to come.
“I’d never been in court before,” Kaley, now 20, tells me in her first newspaper interview. “Seeing all those people, and having all their eyes on me, was very overwhelming.”
Mark Zuckerberg arrives at the Los Angeles court with two members of his entourage, who are wearing Meta glasses. Photograph: Jill Connelly/Getty ImagesLanier knew this was a case like no other – and that his opponents were prepared to use every power at their disposal to win it, including artificial intelligence. Google and Meta have their own AIs: Gemini and Meta AI, respectively. Lanier was determined to beat them at their own game. (A self-described “AI zealot”, his firm employs a team of five whose sole responsibility is to produce a weekly report for him on advances in AI over the previous seven days.) Lanier asked a company called BoodleBox to make him a bespoke AI incorporating a combination of Gemini, Claude, ChatGPT and other existing models. He used it in “30 different ways” for Kaley’s case, he says, but when he tells me about just one of them, my jaw drops.
The jury might have been anonymous, but the legal teams were able to gather a significant amount of data about each member during jury selection, Lanier explains. “We have questionnaires they filled out that tell us their age, their gender, their occupational history, their family status. But it gives us more insight: it asks, who are three people you most admire and why? Who are three you least admire and why? How do you feel about this or that on a scale of one to 10?” Armed with a dossier of information, Lanier’s AI created models of every juror, “a demographic and psychological exemplar” of each one that allowed him to try out potential arguments on individual members. At the end of each day in court, he would feed the transcripts to his AI shadow jury and ask questions. What did juror number 11 think of the witness? What did juror number seven think was important? Where did juror number three get confused? “Pretty cool,” he grins.
AI can be used for good or abused for evil, Lanier says – just like litigation, which he has been practising for 42 years, or religious faith, which guides everything he does. A devout Christian, Lanier believes he is on a divine mission to take on companies that enrich themselves by exploiting the vulnerable.
“The opposing side had unlimited resources. They had dozens of lawyers in the courtroom. To call it a David versus Goliath storyline is maybe giving too much credit to David, but it’s the best descriptor I can give,” he says; the disparity between him and his opponents was even larger than the biggest mismatch in biblical history. “This was a righteous case, without a doubt. It was a holy war.”
Lanier with his daughters Rachel (on left) and Sarah (right), who worked with him on the case, on the steps of the courthouse. Photograph: Ted Soqui/EPA/ShutterstockOn 25 March, when the (real, human) jury returned its verdict, Lanier stood on the steps of the courthouse alongside two of his five children – daughters Sarah and Rachel, who worked with him on the case – and hailed “a righteous moment”. The jury had found Google and Meta liable on all counts and had awarded Kaley $6m: $3m in compensatory damages and an extra $3m in punitive damages, because Meta and Google were found to have “acted with malice, oppression or fraud”. Meta will shoulder 70% of the bill, with Google picking up the rest. But these damages are only the beginning: more than 2,000 similar lawsuits are now being brought against social media companies, accused of harming the mental health of children with products that are addictive by design, using the legal route Lanier proved viable in Kaley’s case.
Ever since they stood behind Trump at his second inauguration, the power of the tech titans has seemed ever more unassailable. (Lanier tells me big tech now hires one lobbyist for every six members of the 441-strong US House of Representatives.) But Kaley’s legal victory is a reckoning – one that could threaten the entire social media business model.
“Politicians will never hold these people accountable. The only thing they fear is a jury,” Lanier says. “I get 12 ordinary people, and they’re empowered. And when they hear that evidence and they take their oath seriously – bam! – they can do something.”
I meet Lanier in Yarnton Manor, a grade II-listed estate in Oxfordshire, built in 1611 by Sir Thomas Spencer, a distant ancestor of Diana, Princess of Wales. He lounges on a teal sofa in one of the wood-panelled rooms, sometimes with a leg dangling over the sofa’s arm, sometimes hugging one of the velvet cushions, often leaning forward to gesticulate in animated excitement as he shares a biblical reference or damning piece of trial evidence. It’s a swelteringly hot day in late May, and Lanier, 65, flew in from Houston yesterday, but he looks fresh as a daisy. He only needs four hours’ sleep a night. “Sleep’s a bonus, but not one that’s necessary.”
Lanier’s charitable foundation bought Yarnton in 2021 and turned it into a centre for religious study. He preaches in a Baptist church every Sunday; he has another study centre in Houston. “In the US at least, Christian faith has a bad reputation of being vibrant only among uneducated, unenlightened, bigoted, narrow-minded people. Those of us who hold on to a faith are responsible for trying to bring out the good that can come from it – not the holier-than-thou stuff that seeds division,” he says. “I’m a lawyer who has funded all of this by trying to grab hold of people whose conduct has been destructive.” He draws a rectangle in the air above his head, tracing the corners of the ornate coved ceiling. “It was the Johnson & Johnson case that bought this,” he grins. “My wife and I call this the J&J Manor House.”
Before he took on Google and Meta, Lanier was involved in some of the most high-profile landmark litigation cases in the history of big pharma. In 2018, he won $4.69bn (reduced on appeal to $2.12bn) for 22 women with ovarian cancer and their families after Johnson & Johnson failed to warn them of the carcinogenic risk associated with the talc in their Baby Powder. Natural talc is often mined within close proximity of carcinogenic asbestos; Lanier argued that Johnson & Johnson had known this for decades without warning the public. (Johnson & Johnson said in 2018: “J&J’s baby powder is safe and does not cause cancer. Studies of tens of thousands of women and thousands of men show that talc does not cause cancer or asbestos-related disease.”) In 2019, he won an 11th-hour $260m settlement from opioid manufacturers and distributors on the eve of what would have been the first federal trial in the history of the opioid epidemic.
Lanier’s “bread and butter”, he says, involves ubiquitous, household-name products that can cause serious harms, which the companies behind them know about but choose not to act on. “Normally, I want an eye-popping verdict that causes Wall Street to recoil and causes in-house lawyers to lose their jobs and companies to respond differently,” Lanier told a podcast recently.
When he began his career, at a big Houston law firm, he just liked winning. He learned the psychological skills and rhetorical techniques that helped him excel in court: how to make things memorable, how to read a room and change the energy in it, “how to make word choices that will trigger visceral reactions, how to use story to bypass people’s natural defences”. But after five years of straight wins, he lost – in a case where he knew his client was in the wrong. Licking his wounds on the drive home, he had an epiphany. “I thought, what am I doing? Did I almost take my gifts, my talents, my skills and wield an injustice?” Aged 29, Lanier started his own firm so he could pick what he considered to be “righteous” cases. “You can do horrible things with this power, or you can do good.”
Lanier estimates that settlements from drug companies following his landmark opioid litigation are now in excess of $10bn. His victory in the Johnson & Johnson case opened the floodgates to tens of thousands of claims from people with cancer and their families – including one currently in the high court of England and Wales, with more than 7,000 claimants. J&J deny the allegations.
In the wake of Kaley’s win against Google and Meta, the former Facebook employee turned whistleblower Frances Haugen claimed that Meta could be on the hook for $1tn in future damages from tens of thousands of people who have been harmed by the use of their platforms as children. This might be an overestimation, Lanier says. “But tens of billions, easy. Part of it also is: are they willing to make real change? Reasonable change is something that a lot of us would put a high value on.”
At the time of the Johnson & Johnson verdict, Lanier remarked that suing in an initial test case with only a small cluster of plaintiffs allowed him to maximise the emotional impact of claimants’ stories on the jury. “It’s easier to get justice in small groups,” he said. “In small groups, people have names, but in large groups, they’re numbers.”
Kaley was a lone plaintiff, and a reluctant trailblazer. It was her mother who brought her case to the attention of lawyers. (Kaley was identified only as KGM in court because the alleged harms took place when she was a child.)
“I was really scared,” Kaley tells me in a video call; she has chosen to keep her camera switched off. “I had a lot of anxiety around the thought of them deleting my accounts as a punishment. And that did end up happening, at least with Snapchat.”
There’s a duality to the way Kaley speaks: giving evidence in the trial has prepared her to be able to answer difficult questions about the most challenging parts of her life, and that, combined with her low voice, can make her sound older than her 20 years. But her responses are often brief and staccato, and she sometimes struggles to find the right words, like a teenager.
Brought up by a single mother in Chico, California, along with an older brother and sister, Kaley grew up with learning disabilities, in a household without much disposable income. By the time she was nine, she had uploaded hundreds of videos to YouTube, and soon had dozens of accounts on both YouTube and Instagram. “I liked that I could post my own stuff and see how many likes I got. I liked being able to see what my friends were up to.” When Kaley wasn’t posting, she was scrolling. She stopped engaging with her family. She no longer left her home. Once, she spent more than 16 hours on Instagram in a single day.
“I was on it every day from the moment I woke up to the moment I went to bed. I was on my phone during class – I would get in trouble, I got bad grades because I was not paying attention.” She was terrified at the thought of anything happening to her phone. “If I was walking next to a lake or something, I’d be so scared that I was going to drop my phone and lose my social media.”
Her mother tried to intervene, activating screen time limits or confiscating Kaley’s phone altogether. “But I would freak out,” Kaley says. “I had withdrawal symptoms. It was just so hard to do anything else.” She would get up in the middle of the night to search for her phone, or “beg and beg and cry” until she got it back. When her mother removed Instagram from Kaley’s phone, Kaley sneaked a hand-me-down phone from her older sister so she could download the app again without her mother knowing.
Almost as soon as she joined Instagram, Kaley started playing with filters, enlarging her eyes, shortening her nose. “I’d take a selfie with a filter on, and then see myself – how I actually looked – and I would just feel really ugly,” she says. “It made me get all these new insecurities, and to see myself in a way that others didn’t actually see me.” Aged 10, Kaley started to cut herself. She went on to be diagnosed with depression, anxiety and clinical body dysmorphia.
Lanier didn’t want Kaley to sit through the entire trial. She gets easily distracted, he says; plus, it was his job to convince the jury that she had been seriously harmed by Google and Meta’s products. He didn’t want her to come away from it believing she was irredeemably damaged.
Delivering his opening statement, Lanier stacked three wooden ABC toy blocks on top of each other. “I thought, I will tell the jury this case is as simple as ABC – Addicting the Brains of Children,” he explains. “There’s a principle in psychology and learning called cognitive ease: we automatically assign credibility to the things we more easily understand. There’s a principle in rhetoric: the power of threes. Threes just seem to resonate within our soul and minds. ABC, one, two, three.” (In his opening statement at the Johnson & Johnson trial, Lanier used ABC Scrabble tiles to impress upon the jury that “Asbestos, Breathed or internalised, causes Cancer”.)
Then Meta lawyer Paul Schmidt delivered his opening statement, pushing back. “Was it Instagram or other causes?” he asked. He told the jury the root of Kaley’s mental health issues lay in her chaotic upbringing; that her home life and learning disabilities meant these problems would be inherent in her life anyway. Lanier bats away this idea. “Just because someone has a headache doesn’t give you the right to bash them over the head with a rock and say, ‘They already had a headache! Don’t blame me!’”
Lanier was not allowed to respond to the defendants’ opening statement in court. But as he walked out of the courthouse that day, he spoke to the throngs of media waiting there. “The next morning we get to court, and the bad guys want to have a discussion with the judge off the record.” In the judge’s chambers, he says, Meta’s team complained that Lanier’s rebuttal to their opening statement was being widely reported in the press, and called on the judge to prevent him from speaking to journalists.
Once again, Lanier deployed the power of three. “I said, ‘First of all, I didn’t do it in court – I’m on the sidewalk outside. Second of all, you’ve instructed the jury not to read any of the media. Third of all, the defendants in this case are social media. They’re producing press releases! They’re putting posts on Instagram!” (While the trial was ongoing, Meta had worked hard to spread the message that the company took the welfare of young people seriously, both on their own platforms and in their wider communications with the public.) “It makes my little comment on the courthouse sidewalk pale in comparison.’” Meta’s lawyers ultimately backed down. “The judge said, ‘You do realise there are four billboards up around the courthouse with your ads on them talking about how you care for children in all you do – and you’re complaining about Mr Lanier?’”
Lanier photographed in the library of Yarnton Manor, Oxfordshire. Photograph: Gareth Iwan Jones/The GuardianThe bereaved families outside the courthouse each day – some waving placards that read “We are KGM” – wanted the wider context of Kaley’s struggles to be recognised. But the defendants had argued that Lanier should not be allowed to mention other young people who had suffered harm as a consequence of social media use. “They wanted to make her the exception,” he says. “The sad part is, we’ve got a generation of Kaleys. Go to a restaurant and look how many people are sitting there in her age range like this …” He takes his phone from the coffee table and hunches over it. “It’s such a waste of human capital. All to make money flow to a handful of rich white guys who want to run the world.”
Parents buy the phones those kids are hunched over, I say. Shouldn’t they be able to establish and maintain ground rules? Lanier smiles. “It’s very naive to think that we have such awesome parents in this world that they can stand up against the trillion-dollar companies – with their algorithms and their deceitful tools – and be well enough informed to fight the most aggressive technology in the history of human civilisation. Kids get on YouTube at school. Kids go over to their friends’ houses. Kids have lunch with other kids. Does parenting make a difference? Of course it does. Can parents beat the machine? No way.”
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Lanier was also not allowed to talk about the content hosted on social media; in the eyes of the law, YouTube and Instagram are not publishers, so are not responsible for the content they host. “But the content is part of what they use to addict you.” Imagine going into a bookshop and idly picking up a book from one of the display tables, he says, only to see every book on every table change to be something statistically proven to be interesting to people drawn to that kind of book – including some that might shock, enrage or titillate you. Touch another title, and all the books change again, as the bookshop narrows down your interests as effectively as it can. Unlike bookshops, the social media algorithms want you to browse for ever.
“The algorithms are amoral – they’re machines. They’re relentless. You’ll never find them wavering, or low on energy, or distracted. And their entire design is to try to keep your attention on their platform. They are scary.”
Meta and Google were damned by their own documents: the millions of pages of evidence the judge required them to hand over, and a few others leaked by whistleblowers. “Through the industrious hard work of a lot of young lawyers reading, and the industrious hard work of AI, we were able to find the lines of gold.” Lanier says it was an embarrassment of riches.
Internal documents showed the companies had deliberately sought out “casino science” to turn their products into what Lanier calls “addiction machines”. Instagram, YouTube, Snapchat and TikTok all use intermittent variable rewards, giving their users little unpredictable dopamine hits, just like slot machines with their micro-payouts that keep you sticking around for a big jackpot that may never arrive, endlessly scrolling on your phone instead of pulling a handle. A 2012 Google memo about YouTube said its “goal is not viewership; it’s viewer addiction”. Another document from Google referred to its products as “slot machines”. “These are attention casinos,” it read. “The house always wins.”
There were documents from Google and Meta revealing the “dark patterns” they deploy to manipulate their users’ behaviour. Take the features Kaley’s mother wanted to use to protect her daughter: they were not easy to find, and were switched off by default. “You’ve got to determine there’s a protective feature, go find it and toggle it on,” says Lanier. “The toggle itself is subject to dark patterns: people will toggle differently if there’s a blue dot when you toggle, versus if it doesn’t change colour.”
This makes me think of my own efforts to control my Instagram feed, by toggling the button requesting that it doesn’t show me suggested content. I have to go into my settings and toggle it again every 30 days, and given that it doesn’t change colour, I’m never really sure that it has worked. “It’s insidious,” Lanier says. “And let’s say, as a parent, you do this for your kid. Did you set a calendar reminder to go back to your kid’s phone 30 days later when it defaults back?” Even if you were organised enough to do this, he adds, the platforms change their settings so often that it’s impossible to keep up.
There was a Meta document from 2018 that read: “If we want to win big with teens, we must bring them in as tweens”; a YouTube slideshow featuring children as young as four and the suggestion that parents could use the platform as a “digital babysitter”; a 2019 research report commissioned by Meta that found teens had “an addicts’ narrative about their Instagram use”, and that “they wish they could spend less time caring about it”.
Then there was the testimony given on the stand. In a memorable exchange with Lanier, Instagram boss Adam Mosseri said that 16 hours a day on the platform might be “problematic”, but he would not call it an addiction. “You can call it problematic use. You can call it tweedledee,” Lanier says. “The issue wasn’t the magic word ‘addiction’ – it was the harm.”
But the prosecution had to prove that Kaley’s use of social media caused the harm done to her mental health, and that was a challenge. “Social media companies have seeded the literature with stuff that says their product’s beneficial. For decades, big tobacco said, ‘Tobacco doesn’t really cause lung cancer – look at all these studies!’ And what you didn’t know is big tobacco had ghostwritten them or funded them,” Lanier says. A psychiatrist and a therapist both testified that, in Kaley’s case, her body dysmorphia was caused by her social media use. “The other side argued it was the residuals of bad parenting.” The sad part, Lanier says, is that Meta’s own documents show they know that when adolescent girls from low socioeconomic backgrounds with existing mental health challenges spend extended periods on social media, their mental health deteriorates.
When Zuckerberg took the stand – the first time he had testified in front of a jury – Lanier put it to him that he “saw dollar signs written on the backs” of vulnerable kids. He presented Zuckerberg with an internal document, which showed that, in 2015, a third of all 10- to 12-year-olds in the US used Instagram, even though under-13s were not supposed to have accounts, and an email from an executive that said, “Mark has decided the top priority for the company is teens.” Zuckerberg said this was no longer the way the company operated, and that he had worked for years to address “problematic use” of his platforms “because it’s the right thing to do”.
At the end of questioning, six prosecution lawyers unrolled a 50ft-wide collage of some of the hundreds of selfies Kaley had posted on Instagram. Urging Zuckerberg to look at the heavily filtered images, Lanier asked him if Meta had ever investigated Kaley’s account for problematic use. Zuckerberg did not answer.
Lanier had planned to question YouTube CEO Neal Mohan on the stand, but ran out of time – the judge had given the prosecution only 43 hours to try the case. “I decided I didn’t need him,” Lanier says. But Google is just as culpable as Meta in Kaley’s case, he adds. “YouTube was a gateway drug.”
Time pressure was one of the reasons why they decided to settle with Snapchat and TikTok before the case came to trial. “I could have hit a good verdict against them,” Lanier says, a little wistfully. He planned to compare the safety features that are present in the Chinese version of TikTok and that aren’t present in its international platform: a limit on night-time use, no infinite scroll, mandatory time-outs once users have been on the app for a certain amount of time, and the deployment of AI to determine if users are children, “based upon factors including what you’re looking at, the size of your finger when you’re scrolling, how fast you scroll. There are tons of ways that they are required to be safer over there.”
Google claimed that the entire case misunderstood YouTube; that it is a streaming platform, not a social media site. “You have an ability to message, to like or dislike, to comment, to follow. It’s not just media – it’s social media,” Lanier declares. But just in case that argument wasn’t enough, the prosecution team asked Google’s very own AI what it thought. Gemini’s response was unequivocal – YouTube is social media.
On hearing the verdict, Kaley’s overriding feeling was relief – for herself, and for all the people who can now follow her. “I knew it meant that other cases would get to go to court, so I was feeling happy for the other families.” The thousands of cases that were poised to be brought against social media companies should she win have now been set in motion. She hasn’t received any damages yet; Google and Meta are appealing, and Lanier says the process will take seven years. “However long it takes is however long it takes,” Kaley says. “I’m OK with it.” Despite her ongoing struggles with her self-image, Kaley’s victory has helped her recognise the contribution she can make to the world, and how much people value her.
Should the case end up at the supreme court, Lanier doesn’t think that the politically appointed judges will be swayed by seeing this as a partisan issue. “It crosses the political aisle. Typically, Republicans are friendly to big business in the US, but some of the most stalwart folks on this are Republicans. It matters to anybody who’s a parent.”
Photograph: Gareth Iwan Jones/The GuardianIn the meantime, Lanier is helping other legal teams who are bringing cases against social media companies, while his firm is fielding new inquiries from people who say they have been harmed by compulsive social media use. “Those that have legitimate cases that I can do, I’ll represent. It’s got to be a child that was addicted. We’ve got to have some counselling or psychiatric records. If it wasn’t bad enough to go see a professional, then it’s not bad enough to bring a case. Within the framework of that, I’ll take those cases.”
Why does the focus have to be on kids? “Children’s brains are still developing, and the last part to develop is that ability for self-control that sees future consequences. With adults, it’s going to be hard to win. The jury’s going to think, You’re an adult, you ought to be able to weigh the consequences,” Lanier replies. “The problem is, once you get addicted, addictive pathways are easily transferable to other addictions. The child who’s addicted to social media can easily become addicted to pornography, sex, gambling, pills. Your body’s ultimately just craving the dopamine.”
Of course, Lanier will not be the lead lawyer on the thousands of new cases being brought against Google, Meta, Snapchat, TikTok and other social media companies. He is clearly very good at what he does, with the skills to win against giants in big pharma as well as big tech. I wonder whether his trailblazing victory for Kaley can be replicated in other courtrooms, by other lawyers.
“That’s a fair question,” Lanier replies. “Embedded in it is a kind of compliment – so thank you, that’s kind. Does the skill of the lawyer make a difference in these cases? Yes, it does. Am I the only lawyer who can win these? Absolutely not. I’m not necessary – but I’m useful.”
In June, Keir Starmer announced a social media ban for under-16s, due to take effect in early 2027, after nine out of 10 respondents to a government survey supported it. Lanier thinks Starmer’s plans are “brilliant. It eats away at the fabric of our society if children have access to materials that they are not mature enough to handle.”
“I think it’s the first step in the right direction,” Kaley says. “But kids are sneaky and they might still find a way to get back on it.”
Some who oppose the ban – including the campaigner Ian Russell, whose 14-year-old daughter, Molly, took her own life after being deluged with suicide and self-harm content – say the only way to protect children is to force social media companies to change their business models, which rely on addictive features and algorithmically driven content. Litigation may be the only way to bring those changes, Kaley says. “They’re only going to change if somebody forces them to.”
Lanier’s firm is now working on a claim against OpenAI brought by bereaved parents who say ChatGPT was instrumental in their son’s suicide. He also has a forthcoming suit against Roblox, the most popular online game platform among eight- to 14-year-olds in the UK. “It’s a breeding ground for child exploitation, a forum that allows child predators to thrive and to connect,” he says. The addictive features of the platform will be part of that case, too.
Kaley tells me she has no idea what the future holds for her. She is still on social media, in the places that haven’t banished her in retaliation for taking legal action against them. She still posts selfies and videos; she thinks she always will, even though she hopes not to one day. “It’s very difficult.”
Lanier is considering writing a book about Kaley’s case. A documentary might be in the works. He has already starred as himself in a movie, the 2011 Chris Evans film Puncture (released as Injustice in the UK). It tells the true story of Michael Weiss, the Houston-based lawyer behind a class-action lawsuit against hospital syringe distributors in the US; after Weiss died from a drugs overdose in 1999, Lanier took on the case and won a landmark settlement in 2004.
Lanier is the first to admit that, in the past at least, he loved attention. “When I was a younger man, probably the quickest way to get hurt was to get between me and a camera,” he says, a twinkle in his eye. Perhaps that’s why, despite everything he has learned, Lanier is still on Instagram.
“I do a video thought for the day, five days a week, based on some biblical idea. They get posted on there for distribution and availability,” he says when I bring this up. “I’m not someone who thinks that social media is inherently evil. It’s like any tool: it can be used for good and it can be used for evil.”
His 15-year-old granddaughter watches his videos, he tells me. So how does Lanier see the future for her, and his 11 other grandchildren? Is the digital world going to be safer for them following Kaley’s victory?
“The optimist in me says yes. The realist in me says not so fast.” He leans forward. “Mark Zuckerberg has immense power, and power is as addictive as any drug. Do we really think that he’s going to readily abandon a portion of his power? The realist in me says this is going to be a war that will last my lifetime – and the lifetime of others.”
In the UK, the youth suicide charity Papyrus can be contacted on 0800 068 4141 or email [email protected], and in the UK and Ireland Samaritans can be contacted on freephone 116 123. In the US, the 988 Suicide & Crisis Lifeline is at 988 or chat for support. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at befrienders.org
The question every retirement-focused investor is weighing right now: with both Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) and Apple (NASDAQ:AAPL) trading as multi-trillion-dollar AI beneficiaries, which of these two megacaps deserves a slot in a long-duration portfolio today?
Google has doubled over the past year, up 96.7%, while Apple has returned 51.1%. Valuation, growth capacity, and how each company converts AI spending into cash flow decide who wins from here. This is a decisive call.
Round 1: Valuation Winner Is Google Google trades at a trailing P/E of 28, with a forward multiple of 26. Apple trades at a trailing P/E of 38 and a forward P/E of 33. On price-to-book, the divergence is extreme: Google at 9x versus Apple at 43x, a spread magnified by Apple returning so much capital that shareholders’ equity now sits at just $106.5 billion as of fiscal Q2.
Google also carries a lower PEG ratio of 1.42 versus Apple’s 2.9. Buying growth this cheap in a mega-cap is a rare setup for retirement portfolios that need decades of compounding.
Round 2: Growth Trajectory Winner Is Google Google’s Q1 FY26 revenue of $109.90 billion grew 21.8% year over year. Google Cloud revenue ballooned 63% to $20.03 billion, with backlog nearly doubling quarter over quarter to over $460 billion. Operating margin expanded by 2 percentage points to 36.1%, and Gemini is now processing 16 billion tokens per minute via direct APIs, up 60% quarter over quarter.
Apple’s Q2 FY26 revenue of $111.18 billion grew 16.6%, powered by iPhone 17 demand and a Services revenue record of $30.98 billion. Strong, and its eight consecutive quarters of EPS beats speaks to operational discipline. It still trails Google’s growth pace by a full 5 percentage points.
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Full-year 2025 shows the same pattern: Google grew revenue 15.1%, Apple grew 6.4%. Google’s 2026 CapEx guidance of $175 billion to $185 billion represents the largest AI infrastructure buildout in corporate history.
Round 3: Capital Returns Winner Is Apple Apple wins this round cleanly. It authorized a new $100 billion buyback in April 2026 on top of $90.71 billion repurchased during FY2025, and raised the dividend 4% to $1.08 annualized. Google only initiated its dividend in 2024, lifting it 5% in early 2026 to $0.22 quarterly. Headline yields are close (Google 0.23%, Apple 0.33%), but total shareholder yield including buybacks favors Apple by a wide margin.
The Verdict For a retirement-focused investor weighing a position today, Google screens as the stronger candidate on the data. Retirees get faster revenue growth, materially cheaper valuation, and direct exposure to the AI infrastructure cycle through the fastest-growing hyperscaler on the market. CEO Sundar Pichai told investors in April that “2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business.” A Cloud backlog past $460 billion is the receipt.
Apple remains a formidable business with unmatched ecosystem lock-in and a capital-return machine retirees who prioritize buybacks may still prefer. The iPhone maker also has a changing of the guard up ahead, with CEO Tim Cook set to step down in September to be replaced by John Ternus, Apple’s SVP of hardware engineering.
Paying a P/E of 38 for 6.4% full-year revenue growth asks the market to sustain a premium if iPhone 17 momentum cools. Google at a P/E in the high 20s for 20%-plus growth with genuine AI tailwinds screens as the better-positioned retirement holding on the current data (readers thinking about which mega-caps belong in the core of a long-hold portfolio may find our Next Nvidia Playbook useful framework reading).
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Warren Buffett served as the CEO of Berkshire Hathaway (BRKA 0.17%)(BRKB 0.33%) from 1965 to 2025, growing it into a $1 trillion conglomerate with numerous wholly owned subsidiaries and a portfolio of stocks and securities that is today worth about $347 billion. Buffett continues to serve as Berkshire's chairman, but his chosen successor, Greg Abel, took over as CEO at the beginning of 2026.
Berkshire Hathaway stock delivered compound annual growth of 19.7% during Buffett's 60-year tenure, which would have been enough to turn a $500 investment made in 1965 into a staggering $24 million as of the end of 2025. Therefore, Abel has very big shoes to fill, and it appears he's already swinging for the fences.
Berkshire purchased shares of Google parent Alphabet (GOOG 0.29%)(GOOGL 0.50%) last year, but it has quadrupled its position since Abel took the helm. The stake is now worth over $30 billion and accounts for almost 9% of the conglomerate's equity portfolio. Alphabet is scheduled to report its operating results for the second quarter on July 22, and that earnings release will be a key test of Berkshire's biggest bet under Abel so far.
Image source: Alphabet.
Berkshire will be looking for more AI-driven momentum at Google Search AI was initially expected to be a massive disruption to Alphabet because chatbots like OpenAI's ChatGPT can be a more convenient way for people to find information online compared to traditional search engines like Google Search. But Alphabet has invested heavily in new AI-powered features like AI Overviews and AI Mode to create a hybrid user experience, and it's paying off.
AI Overviews combine text, images, and links to third-party sources to give users fast responses to their Google Search queries. These answers appear above the traditional search results, so users don't have to sift through web pages to find the information they need. AI Mode, on the other hand, opens a chatbot-style interface where users can expand on their initial queries by asking follow-up questions.
Alphabet said AI Overviews fueled growth in overall Google Search usage during the first quarter of 2026, and it also said a growing number of users globally are tapping into AI Mode. This is critical because when Google Search receives more traffic, it can serve more ads and generate more revenue.
The benefits are already showing up in Alphabet's financial results. Google Search generated a record $60.4 billion in revenue during the first quarter, which was a 19% increase from the year-ago period. It was also the fourth consecutive quarter of accelerating growth, and shareholders like Berkshire will be looking for evidence of further momentum in Alphabet's second-quarter report.
Google Cloud likely had another record quarter While Google Search consistently accounts for more than half of Alphabet's total revenue, Google Cloud is the company's fastest-growing segment. Its revenue soared 63% year over year in the first quarter to $20 billion. Most of that growth can be attributed to Google Cloud's expanding portfolio of AI tools and services.
The cloud computing infrastructure provider operates data centers all over the world that are fitted with advanced chips and components specifically designed for processing AI workloads. Some of those chips come from suppliers like Nvidia, but Alphabet has also designed its own AI chips in partnership with Broadcom. They are called Tensor Processing Units (TPUs), and the latest versions -- the eighth generation of the chips -- are the most powerful yet.
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Google Cloud rents computing capacity from its data centers to other businesses, many of which use it to develop and power AI software. Clients can also access a series of ready-made large language models (LLMs) through the cloud platform, including Alphabet's own Gemini family, which they can use to accelerate their software development goals.
All eyes will be on Google Cloud's second-quarter revenue growth on July 22, but there's another key number investors would be well advised to watch. The platform's order backlog nearly doubled sequentially to $462 billion during the first quarter, driven by customers who were waiting for more data center capacity to come online. If that figure continued to soar in Q2, Wall Street might have to start pricing in even faster future cloud revenue growth, which would be positive for Alphabet stock.
Alphabet stock looks cheap Berkshire owned 17.8 million Alphabet shares at the end of 2025. Under Abel's leadership, the conglomerate has more than quadrupled its position to around 86.4 million shares. Alphabet is now the fifth-largest position in Berkshire's portfolio, just behind Bank of America.
Alphabet stock has set multiple new all-time highs this year, so Berkshire has been buying on the way up. That might surprise people who followed Buffett's career, because he is a value investor who preferred to buy stocks when they were beaten down, or at least trading below what he considered to be a fair price.
However, despite the recent gains in Alphabet stock, it isn't necessarily expensive. It's currently trading at a price-to-earnings (P/E) ratio of 27.3, so it's still cheaper than the Nasdaq-100 technology index, which has a P/E ratio of 35.2. Plus, based on Wall Street's earnings estimate for 2027, Alphabet's 1-year forward P/E is just 24.6.
GOOGL PE Ratio data by YCharts.
One quarterly report is unlikely to derail Alphabet's positive momentum, but there is no denying that the company's financial performance will likely depend on the success of its AI initiatives. As a result, investors might be watching its second-quarter results more closely than usual, given how high the stakes are for this early-stage technology.
July 22 could be an important day for Abel as Berkshire's shareholders gauge the success of his first big swing. However, I expect each of Alphabet's quarterly reports going forward will be equally critical for the new CEO, given the size of this position.
Alphabet remains a Buy with a $399 base-case price target, reflecting its robust AI distribution moat and resilient operating margins. Recent high-profile DeepMind departures are a temporary setback, not a structural threat; GOOGL's innovation pipeline and scale remain intact. Q1 saw Google Cloud revenue grow 63% y/y to $20B, with backlog doubling to $460B, underscoring surging demand and strong execution.
GOOG weekly chart shows long-term trends and approaching second upside channel breakout attempt. Source: TradingView Inverse Head and Shoulders Setup Emerges Until the 50-day moving average is reclaimed, followed by a recovery of the prior swing high, downward pressure remains and could result in another test of recent support. Nonetheless, there is also the potential for a small bullish inverse head and shoulders pattern to develop. The pullback from Tuesday’s high of $370.89 completed a 61.8% Fibonacci retracement of the prior advance, with a low of $348.66 reached Thursday. The pullback has also tested support near the downtrend line, which previously represented dynamic resistance.
If Thursday’s low is retained, followed by a rise above Thursday’s high of $356.73, a one-day bullish reversal will trigger from the confluence of trendline and Fibonacci support, while a new higher swing low will also be established. That would create a second shoulder of a potential inverse head and shoulders bullish reversal pattern, with a breakout above the neckline at $370.89 confirming the pattern.
Further, although a decline below $348.66 would lead to a deeper pullback, the inverse head and shoulders pattern would remain valid provided a higher swing low is subsequently established above the left shoulder low at $343.63. Whether the stock confirms that pattern or instead extends the correction will likely determine the next significant move, making the developing support zone important to monitor.
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Alphabet (NASDAQ:GOOG | GOOG Price Prediction) has quietly become one of the most compelling risk/reward setups in mega-cap tech. Shares trade at $363.62 after a 105.37% one-year rally, yet the stock still carries a trailing P/E of just 28 against 37.9% profit margins.
Our 24/7 Wall St. price target for Alphabet is $441.58, pointing to 21.44% upside over the next 12 months. The recommendation is buy, with high confidence at 90%.
24/7 Wall St. Price Target Summary Metric Value Current Price $363.62 24/7 Wall St. Price Target $441.58 Upside 21.44% Recommendation BUY Confidence Level 90% From $173 to $363: How Alphabet Got Here Alphabet has been one of the year’s standout large-cap performers, up 16.03% year-to-date and more than doubling from a 52-week low of $173.38. Shares sit roughly 6% below the 52-week high of $404.23 after a 0.52% pullback over the past month.
The rally is anchored in fundamentals. Q1 FY2026, filed April 29, 2026, delivered EPS of $5.11 against a $2.63 consensus, a 94.10% beat. Revenue of $109.90 billion grew 21.8% year over year, and Google Cloud surged 63% to $20.03 billion with backlog nearly doubling to over $460 billion. That is the fourth straight EPS beat.
Why Bulls See a Breakout Ahead The bull thesis rests on AI monetization at scale. Gemini is processing 16 billion tokens per minute, up 60% QoQ, while Gemini Enterprise paid MAUs grew 40% quarter-on-quarter. Alphabet now counts 350 million paid subscriptions, and Waymo crossed 500,000 autonomous rides per week.
CEO Sundar Pichai told investors “2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business.”
Wall Street agrees. The analyst consensus target sits at $426.62, with 44 Buy and 14 Strong Buy ratings versus zero sells. Our bull case scenario sees $459.76 within 12 months, a 26.44% return, if cloud backlog conversion accelerates.
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What Could Go Wrong The bear case starts with capital intensity. Alphabet guided $175-$185 billion in 2026 CapEx, and Q1 free cash flow fell 46.63% YoY to $10.12 billion. If AI infrastructure ROI disappoints, margins compress. Prediction markets are notably cautious, assigning only 15.5% probability that Alphabet is the largest company by year-end, and insiders have logged 179 net-selling transactions.
That FCF compression reflects deliberate reinvestment, with operating margin expanding to 36.1% and operating cash flow rose 26.67%. Regulatory risk, including the $3.5 billion EU competition fine, adds tail risk. Our bear scenario points to $355.92, essentially flat.
Alphabet Price Prediction 2026-2030 Our 24/7 Wall St. price target of $441.58 reflects a buy at 90% confidence. The tipping factor is cloud backlog visibility: $460 billion in signed commitments converts to years of high-margin revenue.
The setup looks constructive if Q2 shows continued Gemini enterprise traction and cloud growth holding above 50%. The thesis weakens if CapEx guidance rises further without a corresponding backlog uplift.
Year 24/7 Wall St. Price Target 2026 $387.91 2027 $441.58 2028 $505 2029 $578 2030 $654.25 These projections assume Alphabet continues executing on cloud, AI, and Waymo commercialization. Significant upside could come from Gemini monetization breakthroughs, while downside would follow a broad unwind of AI capex enthusiasm.
If You'd Bought Amazon When the Motley Fool Said To…In September 2002, Stock Advisor told subscribers to buy Amazon. In December 2004, Netflix. In April 2005, Nvidia. The newsletter still publishes two new stock picks every month — and over 23 years, has more than quadrupled the S&P 500. Here's how to get this month's picks:
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Jim Cramer used his July 9 Mad Money segment to identify what he evidently sees as a crucial structural advantage in artificial intelligence: distribution across Apple‘s (NASDAQ:AAPL | AAPL Price Prediction) ecosystem. “If there’s only going to be one winner in AI, it’s going to be Google with Gemini, because it’s the default on Apple’s installed base of 2.5 billion devices. That was enough to wipe out all comers once before with Google Search.” The premise is that a Gemini default across Apple’s 2.5 billion devices would replicate the search-era distribution lock-in that made Alphabet‘s (NASDAQ:GOOGL) Google untouchable for two decades.
Cramer is characterizing the Apple-Gemini arrangement as a strategic setup rather than confirmed commercial terms. The distinction matters because the bull case rests on distribution economics that have not been fully finalized in public.
The Distribution Thesis Google already pays Apple to be the default search engine inside Safari, disclosed in prior DOJ antitrust testimony. If that same rail pushes Gemini into Apple Intelligence experiences, Google gains instant access to the largest premium consumer footprint on earth without building a phone.
The original Google Search moat came from the compounding effect of being the default answer on every browser and device that mattered, well beyond algorithmic superiority.
Inside Alphabet’s Numbers Alphabet’s Q1 2026 revenue came in at $109.9 billion, up 22% year over year (YoY), with EPS of $5.11 versus a $2.63 consensus. Google Cloud grew 63% to $20.03 billion, with backlog nearly doubling quarter over quarter to over $460 billion.
Google CEO Sundar Pichai stated on the earnings call, “Our AI investments and full stack approach are lighting up every part of the business. Google Search had a strong quarter with AI experiences driving usage, queries at an all time high, and 19% revenue growth.” Gemini is now processing 16 billion tokens per minute via direct API, up 60% quarter over quarter.
Alphabet trades near a P/E ratio of 15x versus Apple’s 42x, with an analyst consensus target of $432 against a current price of $354.88. GOOGL stock is up 13% year to date (YTD) and 99.5% over the past year.
Berkshire Hathaway‘s (NYSE:BRK-B) endorsement adds institutional weight. New CEO Greg Abel opened an Alphabet position in Q3 2025, added shares in Q1 2026, and participated in a $10 billion private placement inside Alphabet’s $80 billion AI-funding raise, building a stake of roughly $31.1 billion, 9% of the portfolio. Notably, Berkshire still holds Apple as its largest position at about $57.8 billion, meaning it now owns both sides of the Cramer trade.
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Apple as the Distribution Funnel Apple CEO Tim Cook confirmed the scale on the January 29 earnings call, stating, “Our installed base now has more than 2.5 billion active devices, which is a testament to incredible customer satisfaction for the very best products and services in the world.”
Apple’s Q2 FY2026 revenue came in at $111.18 billion with Services revenue at an all-time record of $30.98 billion. Apple shares are up 16% YTD.
The Bear Counter A P/E ratio of 15x can reflect real risks: ad-market cyclicality, intensifying AI competition from OpenAI and Anthropic, and unresolved antitrust exposure. Reddit sentiment tracked bearish scores of 28 to 43 in late June on news that Gemini co-lead Noam Shazeer and other AI researchers were departing for OpenAI and Anthropic.
A default-placement deal itself could invite fresh regulatory scrutiny, so distribution advantages that look permanent on paper are not automatically durable. The prediction markets currently give only 5% odds that Google will be first to hit a 1550 Arena score in 2026, a reminder that model leadership is genuinely contested.
The Bottom Line Cramer’s argument reduces to a simple question: does distribution beat model quality when the gaps narrow? History with search suggests yes, and Alphabet’s 36% operating margin alongside $175 billion to $185 billion in 2026 CapEx guidance shows the company is spending as if it believes the same.
Investors can watch for two catalysts: the next Gemini Pro release, which prediction markets price at a 78.7% probability by July 31, and Alphabet’s Q2 2026 earnings, where markets assign a 78.5% probability of a beat. Both could confirm or complicate the distribution thesis in real time.
Given the antitrust and competitive overhangs, investors should consider sizing their positions modestly even if they share Cramer’s conviction. The valuation gap between GOOGL and AAPL is real, but so are the reasons the market has left it on the table.
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Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider Silicon Motion?The final step today is to look at a stock that meets our ESP qualifications. Silicon Motion (SIMO - Free Report) earns a #1 (Strong Buy) 19 days from its next quarterly earnings release on July 29, 2026, and its Most Accurate Estimate comes in at $2.29 a share.
SIMO has an Earnings ESP figure of +7.68%, which, as explained above, is calculated by taking the percentage difference between the $2.29 Most Accurate Estimate and the Zacks Consensus Estimate of $2.13. Silicon Motion is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
SIMO is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Alphabet (GOOGL - Free Report) .
Alphabet is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on July 22, 2026. GOOGL's Most Accurate Estimate sits at $2.90 a share 12 days from its next earnings release.
For Alphabet, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.86 is +1.30%.
Because both stocks hold a positive Earnings ESP, SIMO and GOOGL could potentially post earnings beats in their next reports.
Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
OpenAI and Google have confirmed that they supplied advanced artificial intelligence services to Singapore-based subsidiaries of Alibaba, Baidu, and Tencent, companies that the US government has accused of having links to China's military.
The disclosures have renewed debate over whether Washington should tighten export controls on advanced AI models in addition to restrictions on semiconductor exports.
The companies told the Financial Times that the services were provided legally through overseas subsidiaries.
However, the arrangements have highlighted what critics describe as a gap in US efforts to limit China's access to cutting-edge AI technologies.
OpenAI said it suspended API access for Alibaba-affiliated users last month following concerns over suspected misuse.
According to the company, the suspension was linked to suspected distillation, a process in which developers use the outputs of advanced AI models to improve competing systems.
An OpenAI spokesperson told the Financial Times that the activity had been reported to the US government.
OpenAI said it does not permit access to its AI models from within China.
However, it confirmed that "some companies" with Chinese ownership or headquarters are allowed to use its tools for operations in countries where the company can enforce safeguards and monitor for distillation risks.
The company added, "We would rather see more of the world using AI shaped by democratic values than AI controlled by autocratic governments".
Although the transactions remain legal, they have prompted renewed calls for Washington to impose tighter controls on advanced AI models, similar to restrictions already placed on the export of high-end AI chips.
The US government has introduced controls covering individual frontier AI models, including Anthropic's Mythos and Fable, as well as OpenAI's GPT-5.6.
However, current regulations do not broadly prohibit Chinese-headquartered companies from accessing advanced AI software, including companies listed on the Pentagon's congressionally mandated 1260H blacklist, which identifies entities alleged to have ties with the People's Liberation Army.
Google said its AI services remain available in Hong Kong and Singapore, subject to the company's usage policies, including restrictions against distillation.
The company said geographic sales restrictions alone are not enough to eliminate distillation risks because sophisticated users can circumvent location-based controls.
Anthropic has taken a more restrictive approach by prohibiting Chinese companies and foreign entities owned by them from using its advanced AI models.
The company acknowledged that enforcing the restrictions has been challenging.
Last week, it said it had closed loopholes that previously allowed some Chinese companies to bypass its safeguards against unauthorised access.
Anthropic has previously accused Chinese AI developers DeepSeek, Moonshot and MiniMax of engaging in distillation.
Last month, the company also told Congress that Alibaba allegedly used 25,000 fraudulent accounts to generate more than 28.8 million exchanges with Claude, claiming the activity violated its terms of service.
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Aimen Moten moved to the US from Pakistan before becoming a software engineer at Google. Aimen Moten This as-told-to essay is based on a conversation with Aimen Moten, who has worked as a software engineer at Google since March. She's in her 20s and lives in the San Francisco Bay Area.
I work as a software engineer at Google, and I don't code that much anymore.
Instead, I spend more time reviewing AI-generated code, making design decisions, and deeply understanding how things work.
The job of an engineer is 100% changing due to AI, and we need to adapt. But before I had to think about adapting to AI, I first had to land a job.
Getting a job at Google was far from easy. For me, that journey started long before my first Google interview.
My original goal was to graduate from college earlyI'm originally from Pakistan, and I came to the US in 2022 to pursue a computer science degree at DePauw University.
My goal was to graduate in three years because college was expensive. Even with a partial scholarship, school-related expenses still cost more than $10,000 a semester. And since I wasn't a US citizen, I wasn't eligible for federal student loans. My parents helped pay for my first few semesters, but I knew I might have to rely on scholarships and internship earnings to get me through the rest of college.
If I graduated early, I'd need a job right away. So, during my sophomore year, my strategy was simple: apply to as many internships as possible, land the best one, earn a return offer, and put myself on the quickest path toward a full-time software engineering job.
I was strategic in my internship applicationsI attended tech conferences like the Grace Hopper Celebration to network and learn when different internship applications would open. The conference gave me a heads-up, and I made sure to apply as soon as the applications were released.
The summer before my sophomore year, I also spent a lot of time cold-messaging people on LinkedIn at companies I was interested in to learn about their experiences. When I eventually applied, I was able to ask some of those people for referrals and received several.
During this search, I applied to what felt like hundreds of internships and went through several interview processes, including one that stretched six rounds.
Aimen Moten says AI has changed how she works as a software engineer at Google. Aimen Moten I landed an internship at Google and had to adjust my plansEventually, I landed an interview for a software engineering internship at Google, and ultimately received an offer for the internship, which was based in Cambridge, Massachusetts. Ironically, Google was one of the few companies I interviewed with where I didn't have a referral.
My first Google internship was a very positive experience, but I had to adjust my graduation and full-time job search timeline. I was told that returning to Google for a second internship would be the best path to a full-time software engineering offer.
The following summer, I returned to Google for my second internship and received the full-time offer I'd been waiting for. After graduating in three and a half years in December 2025, I moved to the Bay Area and started as a full-time software engineer in March.
Looking back, I'm especially grateful that I received my return offer because I know how difficult today's tech job market has become. I know so many incredibly qualified people who are still looking for opportunities.
My career advice for young engineersOne lesson I learned from my job search is that taking care of yourself matters. Everyone talks about optimizing your résumé and preparing for interviews, but if you can't show up at your best, none of that matters.
I've met people who have gone from one internship search to another or from one job search to the next. Everybody tells you to work hard, but nobody reminds you that you need to take care of yourself. No matter how good your résumé is, if you're too burned out to talk about it, there's no point.
I also think today's job market requires students to adapt more quickly than ever before. Schools are still figuring out how to incorporate AI into their computer science curriculums, but engineers entering the workforce need to learn how to use these tools effectively.
Given how fast AI is moving, I think all of us in tech feel some level of pressure to use AI at work and in our personal lives — and "FOMO" if we don't. That said, I don't think AI is taking my job anytime soon.
From what I've seen during my first few months at Google, AI isn't replacing software engineers — it's just changing how we work. If you're a good engineer, you know how important humans still are in the engineering process.
Still, I know the job market for engineering roles isn't easy — and I don't take my opportunity at Google for granted.
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Two of the most-watched names in artificial intelligence go head-to-head almost every week in investor debates. Alphabet (GOOGL 0.90%) (GOOG 0.73%), the parent of Google, and Meta Platforms (META +4.75%), the owner of Facebook and Instagram, are both spending fortunes in pursuit of leading positions in the AI race.
Each has a strong claim. But if I had to put fresh money into one today, I would choose Alphabet, and the reason has less to do with which one's model scores higher on benchmark tests than with which one can turn its model into money.
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AI battles are won on distribution It can be easy to get lost in the large language model (LLM) horse race. This year alone, Google unveiled Gemini Omni and Gemini 3.5 at its I/O event, while Meta Platforms launched Muse Spark, the first model from its new Superintelligence Labs.
Impressive as these are, models leapfrog each other every few months, so any LLM's lead in raw capability rarely lasts. What does last is distribution -- the ability to put your AI in front of billions of people who already use your products.
This is where the two companies diverge and where Alphabet's advantage becomes clear.
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Why Alphabet owns the full AI stack Alphabet is one of the few companies that controls every layer of the AI stack. It designs its own custom Tensor Processing Units (TPUs), so it does not have to buy every AI accelerator it requires from an outside supplier. It builds its models in its Google DeepMind division. And it owns channels that reach users at scales almost no rival can match: Search, Android, Chrome, YouTube, and Google Cloud.
That vertical integration is showing up in products. At Google I/O 2026, the company's developer and technology conference, it introduced its biggest Search redesign in 25 years, rebuilt around AI. It also debuted Gemini Spark, an agent that can act across a user's connected apps.
When you own the front door that billions of people walk through, you do not have to convince anyone to try your AI because it is already there. That reach is what converts research spending into revenue, and it's an advantage that Alphabet's rivals cannot readily copy.
Image source: Getty Images.
Meta's expensive bet on superintelligence However, Meta Platforms is not standing still, and its advertising business remains a cash-generating machine that can fund enormous levels of AI investment. The company reorganized around Meta Superintelligence Labs and brought in Alexandr Wang to lead the unit. Its new Muse Spark model is both capable and efficient.
Two things give me pause. First, Meta shifted Muse Spark to a proprietary model after years of championing the open-source Llama family. That reads like a strategy that had to be reworked rather than one going to plan.
Second, Meta's AI mostly pays off for it in indirect ways. It pays off through sharper ad targeting and more time spent scrolling. Those are valuable gains, but they create a longer, less certain path from spending to profit than dropping Gemini into a search bar that already prints money.
The risks to the Alphabet thesis No case is one-sided. Alphabet faces real antitrust pressure over how it operates its search and advertising businesses, and court-ordered remedies could reshape parts of the company. There is also a genuine risk that AI-generated answers will eat into its ability to serve up the search ads that still provide most of its profits -- and Search is the very product it is reinventing.
Meta, for its part, has a long record of turning ambitious bets into gains in engagement, and its scale across social media should not be dismissed. Any investor who believes attention is the ultimate moat has a reasonable case for buying shares of Meta.
Both stocks can win in a growing AI market, and neither would be a poor holding. For an investor deciding on where to put money today, though, Alphabet offers a rare combination: It owns the chips, the models, and the distribution, and it is already weaving AI into products people use every day.
Meta's story leans more on a costly bet paying off on schedule. The more complete and self-funding AI machine, to me, is Alphabet.
Google is rolling out a new feature aimed at helping people understand when an ad they’re seeing was made using AI technology.
AI makes it easier for businesses to create ads, place their brand’s products in various settings, and save money on real-world e-commerce photography. But it can also be misleading if consumers don’t know that what they’re looking at isn’t a real product photo. While Google prohibits misleading and deceptive ads, an ad can still leverage AI to create some type of synthetic or digitally altered content. Until now, that’s something Google only required election ads to disclose.
ScreenshotImage Credits:Google The tech giant said the new consumer-facing feature will be introduced to the “My Ad Center” panel, which anyone globally can access by clicking the three-dot menu or on the info icon on the ads they come across via Google Search, YouTube, and Google Discover.
This panel already lets users block or report ads, learn more about the advertiser or why the ad was shown, among other things. Now, users also see an option that says “how this ad was made,” which will indicate if the ad was created or edited with AI.
Google says that when advertisers use its own generative AI advertising tools to create ads, the disclosure will be automatically enabled.
However, if the ad is created elsewhere, the advertiser will need to use a new control to indicate if AI was involved in its creation — Google will not perform its own check to determine if that’s the case. In some markets, the ad may also be labeled as AI if local law requires it.
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Alphabet earns a 'Buy' rating, with medium-term upside driven by ecosystem expansion and M&A-driven synergies, notably the Wiz acquisition. GOOG's business verticalization and integration of assets are expected to protect and potentially expand margins as AI and cross-selling opportunities scale. Key catalysts include a doubling GCP backlog, monetization of 8th-gen TPUs, and bundled premium offerings, supporting above-consensus growth rates.
Alphabet (NASDAQ:GOOG | GOOG Price Prediction | GOOG Price Prediction) just posted the loudest AI quarter of any megacap. Revenue of $109.90 billion was up 21.8% year over year, cloud grew 63%, and CEO Sundar Pichai declared that “our AI investments and full stack approach are driving performance across our business.”
Shares sit at $364.90 after a 16.43% YTD move. The question I want to answer: can this stock realistically trade at $700 by 2030?
What’s Holding Alphabet Back Right Now Alphabet is digesting a monster rally. The stock is up 102.68% over one year, but the one-month change is -0.17% and shares trade 6% below the 52-week high of $404.23.
The pause has a clear cause: capital intensity. Q1 CapEx hit $35.67 billion, more than double year over year, and management now guides 2026 CapEx to $180 billion to $190 billion with 2027 to significantly increase. Free cash flow fell 46.63% year over year in Q1. With a beta of 1.247, the stock swings hard when investors question whether AI spend converts to durable returns.
Wall Street Sees 17% Upside. Our Model Sees More The Street consensus target is $426.62, with 14 Strong Buy, 44 Buy, 7 Hold, and zero Sell ratings. Bullish sentiment is 89%. Our model’s one-year base case is $441.86 (upside of 21.09%), with a bull case of $460.11 and bear case of $356.11.
For 2030 the base case is $605.69 at 90% confidence, with a bull case of $649.17. I think consensus is too static. Quarterly earnings growth of 82% YoY and cloud backlog of $462 billion argue analysts are anchored to a pre-Gemini earnings power that no longer applies.
The Path to $700 Per Share Reaching $700 from today’s price of $364.90 would require a gain of 91.8%. Spread over four years, that is roughly 17.7% annualized, aggressive but not unprecedented for a compounder posting 20%+ revenue growth.
Now the multiple math. With forward EPS of $15.47, a price of $700 implies a forward P/E of 45x. Our base case of $605.69 already implies 28x, so $700 requires an additional 17x of multiple expansion on today’s EPS base. That only works if EPS itself keeps compounding. It might.
Google Cloud grew 63% in Q1 with backlog nearly doubling sequentially, Gemini API is now processing more than 16 billion tokens per minute, and paid subscriptions crossed 350 million. Pichai calls Alphabet “the only provider in the market that offers this full vertical stack”.
Where Alphabet Trades Today vs Its Earnings Power At $364.90 against forward EPS of $15.47, the stock trades at roughly 24x forward earnings, hardly demanding for a business growing revenue 22% and operating income 30%.
Shares sit between the 52-week low of $173.38 and high of $404.23. Over the past decade the stock has returned 943.42%. That kind of compounding can extend on continued execution in cloud, search, and Gemini monetization.
Is $700 Realistic? Here’s My Take $700 by 2030 requires a 91.8% gain, which comes down to two things: Google Cloud continuing its explosive trajectory and search ad revenue defending margins as AI Mode scales. A third helpful item is agentic commerce actually monetizing through the Universal Commerce Protocol.
What derails it is a CapEx cycle where 2027 spend outruns cash generation for too long. My verdict: a stretch, but a credible one. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Alphabet could reach $700 in 2030.
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Alphabet?Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Alphabet (GOOGL - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.90 a share, just 13 days from its upcoming earnings release on July 22, 2026.
By taking the percentage difference between the $2.90 Most Accurate Estimate and the $2.86 Zacks Consensus Estimate, Alphabet has an Earnings ESP of +1.30%. Investors should also know that GOOGL is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
GOOGL is just one of a large group of Computer and Technology stocks with a positive ESP figure. Intuit (INTU - Free Report) is another qualifying stock you may want to consider.
Intuit, which is readying to report earnings on August 20, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $3.61 a share, and INTU is 42 days out from its next earnings report.
Intuit's Earnings ESP figure currently stands at +0.65% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.59.
GOOGL and INTU's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
Visitors walk near a logo of Google at Bharat Mandapam, one of the venues for AI Impact Summit, in New Delhi, India, February 17, 2026. REUTERS/Bhawika Chhabra/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesGoogle counts India as a key growth market for search, adsCourt said Google ad platform was allowing trademark breachGoogle says ruling has major consequences for digital ad marketNEW DELHI, July 9 (Reuters) - Google (GOOGL.O), opens new tab has challenged an Indian court ruling that it infringed on a company's trademark rights by allowing rivals to use its name as an advertising keyword, arguing the decision will hurt consumers, documents reviewed by Reuters show.
The May decision could reshape the online ads market in a country where Google last year earned $4.1 billion in gross advertising revenue but where it is also facing a raft of antitrust cases and court battles.
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To ensure their ads are promoted by Google and target the right customers, companies bid on keywords that online consumers type into the search engine.
Indian bathroom fittings maker Hindware, however, accused its rivals of purchasing keywords related to its brand on the Google ads platform, so that their websites appear at the top of searches when consumers typed in "Hindware".
The Delhi High Court ruled against Google in the case, ordering it to pay damages of $31,600 and other litigation costs.
In its 4,761-page challenge, which is not public but was reviewed by Reuters, Google said the decision makes India the "sole outlier" among global jurisdictions "with serious consequences for the digital advertising industry, online consumer choice, and competitive markets."
Researchers have observed that consumers may search for a brand in order to identify and assess alternatives, Google wrote in the July 7 filing, arguing the ruling will effectively grant trademark owners a "monopoly over advertising space to the detriment of consumers."
In a response to a Reuters request for comment, Google confirmed it is appealing the order, which it said "diverges from established legal precedents in India". It added that its ads policies reflect standard practices that enable competition.
Google India's appeal will be heard in the coming days.
GOOGLE SELLING SOMETHING IT DOESN'T OWN, JUDGE SAYSIf upheld, Indian lawyers and tech experts say the original ruling will have wide-ranging ramifications for how the online ads market operates.
Indian matchmaking service Shaadi.com, for example, said that it would change the economics of online ads for millions of businesses that were suffering when their competitors bid on their name and Google took a fee.
Justice Mini Pushkarna noted in the decision in May that Google could not be permitted to shrug off responsibility after making a tool available that leads to trademark infringement.
"Google has attempted to sell something that it simply does not own," Pushkarna wrote.
Google's appeal rejects the position that it has infringed on trademarks, arguing that "a keyword is merely used as an internal and backend trigger to display an ad" and is simply "making advertising space available".
Google also faces antitrust cases in India as well as legal challenges over AI training and stricter-than-ever content takedown regulations that began applying to tech companies from February.
Reporting by Aditya Kalra; Editing by Joe Bavier
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Aditya Kalra is the Company News Editor for Reuters in India, overseeing business coverage and reporting stories on some of the world's biggest companies. He joined Reuters in 2008 and has in recent years written stories on challenges and strategies of a wide array of companies -- from Amazon, Google and Walmart to Xiaomi, Starbucks and Reliance. He also extensively works on deeply-reported and investigative business stories.
Alphabet-owned Google broke a search record thanks to the World Cup international soccer tournament.
During the knockout World Cup round Tuesday, Argentina's national team mounted a late comeback where Cristian Romero scored a goal then Lionel Messi equalized with his own goal in the 83rd minute for the win.
"Google Search broke all prior usage records and saw its highest usage in history right after Argentina scored their winning goal in yesterday's match" wrote Nick Fox, head of Google's Knowledge and Information unit Wednesday.
A company spokesperson did not share specific numbers but told CNBC "we saw the most queries per second happen right after the winning goal."
The milestone comes as the company tries to prove its traditional search engine can keep its relevance in the age of AI, where chatbots have become more prevalent. Google still controls 90% of the search market, its stock price has more than doubled in the past year and revenue growth in the first quarter was the fastest for any period since 2022.
Google said its top searched query after the game was "argentina vs egypt."
Globally, the company also saw people searching for things like "argentina x colombia" and "how many world cup goals does messi have." Additional queries included "what is it called when a player hits another player in game" and "is it messi's last world cup."
