Factors driving Alphabet stock rise include revenue growth, AI innovation, and increased profitability

From Nasdaq: 2025-06-23 00:05:00

Google’s stock (NASDAQ:GOOG) has fallen 7% YTD, underperforming the S&P 500 due to regulatory scrutiny and AI concerns. Despite this, GOOG stock has doubled since 2023, supported by a 47% increase in the Price-to-Sales ratio, a 27% jump in revenues, and a 7% reduction in total shares outstanding.

Google’s revenue growth is driven by its cloud segment and core search business, with AI playing a key role. AI-enabled features have improved Search engagement, while Waymo, its autonomous driving unit, now delivers over 250,000 paid rides weekly.

Google’s operating margin has expanded by 600 basis points since 2022, driven by profitability in Google Cloud and strong advertising business. The company’s P/S ratio has risen 47% to 6.1x, reflecting improved profitability and investor sentiment.

GOOG stock, currently trading at $180, has a P/S multiple close to its five-year average. Strategic AI initiatives are expected to drive further growth, but risks include internal challenges, regulatory headwinds, and macroeconomic uncertainties.

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Read more at Nasdaq: What Factors Drove A 2x Rise In Alphabet Stock?