From Nasdaq: 2025-02-17 08:00:00

Alphabet reported mixed Q4 performance, with revenue up 12% to $96.5 billion and EPS at $2.15, slightly beating estimates. Google Cloud revenue fell short, sparking concerns over future cash flows. Shares dropped 9% post-earnings.

Despite challenges, Alphabet’s strong fundamentals shine through. The company generated $72.8 billion in free cash flow in 2024 and returned $70 billion to shareholders. Its AI strategy, search, and advertising models, coupled with a reasonable valuation, make it an attractive pick for 2025.

Alphabet’s robust AI strategy, infused across all key products, is driving growth in its cloud business. The company’s $75 billion capex plan for 2025 may boost Google Cloud’s growth and improve margins. Search and YouTube ad revenue continue to impress, with the latter dominating U.S. streaming services.

Analysts expect revenue and EPS growth for Alphabet in 2025, with a strong balance sheet and impressive operating margins. Google Cloud’s growth, coupled with Waymo’s progress in autonomous driving, add to the company’s appeal. Despite concerns over capex, Alphabet presents compelling growth opportunities in the long run.



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