Being scrutinized yet being on the cusp isn’t new for Google (GOOGL) stock.
However, its next act might be its sharpest to date.
💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter💰💵
Its AI rollout has efficiently evolved from abstract to actual, and Wall Street is taking notice.
Earnings are around the corner, and big-name players are already adjusting their expectations.
Hence, beyond the hype, it’s more about the numbers, the strategy, and whether Google’s long game in AI is finally paying dividends.
Google stock rides momentum as AI turns into revenue
If 2023 was the year when Google showed off its AI muscles, 2025 is the year it started getting paid for it.
Related: Veteran analyst drops surprise call on Tesla ahead of earnings
Case in point is Google’s Q1 earnings print, which made it clear that generative AI is far from being just a buzzword for its business.
Revenue surged 12% year-over-year to $90.23 billion, while net income rose in tandem by 46% to a superb $34.54 billion.
CEO Sundar Pichai didn’t mince words in saying how AI-powered improvements across Search, Ads, and Cloud drove that stellar performance.
Also, it isn’t just about flash, and it’s about function for Google.
‘AI Mode’ and conversational summaries are now the default across Search, Discover, and YouTube.
Instead of the age-old static search results, users get smart, dynamic answers, facilitating Google to a clear upgrade path from free search to paid subscriptions. Also, the Google One AI Premium tier is already seeing traction.
Ads are way smarter too.
Google’s Performance Max campaigns enable brands to auto-generate everything from headlines to display assets using generative models.
That results in more effective targeting, quicker execution, and higher conversion rates, all monetized under Google’s classic PPC model.
Enterprise clients aren’t left out either.
Gemini-powered Duet AI now lives inside Workspace apps, and with new tiered subscriptions (AI Pro and AI Ultra), Google is opening new monetization layers in its productivity suite.
Moreover, in the Cloud, tools like Vertex AI Studio and Agent Builder have become full-fledged AI platforms.
Meanwhile, Google One has gone past 150 million subscribers, on the back of AI-powered storage and productivity upgrades.
More Tech Stock News:
- Top economist drops 6-word verdict on Trump tariffs, inflation
- JPMorgan reveals 9 stocks with major problems
- Bank of America quietly reboots Microsoft stock price target
Underneath it all is a whopping $75 billion AI investment plan for the year, which includes new data centers and cutting-edge TPUs, designed to ensure its AI flywheel keeps spinning.
Google stock gets Morgan Stanley vote of confidence
Morgan Stanley just turned it up a notch on Google stock, hiking its price target to $205 from $185 while reaffirming its Overweight rating.
Related: Amazon’s quiet pricing twist on tariffs stuns shoppers
The firm’s latest call is that it sees Google’s innovation engine accelerating, and it wants investors to pay attention.
The research note lands just shy of Google’s next earnings, and Morgan Stanley didn’t mince words.
It remains bullish on Google, lauding its “productization,” which is an endorsement of its ability to turn its GenAI tools into real, monetizable features.
Investors should also expect greater focus on transparency.
Additionally, improved disclosures, especially around GenAI-driven engagement and monetization, are critical in supporting the next leg of Google’s expansion growth.
The search debate? Still ongoing.
Morgan Stanley feels we’re unlikely to get full clarity in the back half of 2025. Instead, the focus is now more on profitable search growth and any signs that EPS estimates might be too low.
Moreover, if it can come out of the Department of Justice’s antitrust measures unscathed, Morgan Stanley sees a real shot at an Apple-Gemini tie-up that could shake up the AI landscape.
Other Wall Street heavyweights are also lauding Google stock ahead of earnings. BofA assigns a $210 stock target, citing stable search ad growth.
Similarly, KeyBanc is even more aggressive, upping its target to $215, on the back of the strength in Search, YouTube, and Cloud.
As we look ahead, Google’s Q2 EPS is pegged at $2.19, up from $1.89 in the year‑ago period.
Revenue is forecast at $93.93 billion, compared to $84.74 billion last year.
That marks close to a 16% EPS growth along with an 11% jump in its top‑line.
Related: ChatGPT, AI chatbots may have a big problem on their hands
