TLDR
- Google (GOOGL) secured a $10 billion cloud deal with Meta over six years, strengthening its position against AWS and Microsoft Azure
- The stock gained 6% in five days and 10% over one month, outperforming the S&P 500 with 24% gains in six months
- Q2 2025 earnings beat expectations with $2.31 EPS vs $2.17 estimate and revenue of $96.4 billion, up 14% year-over-year
- Google Cloud revenue surged 32% to $13.6 billion with operating income more than doubling to $2.83 billion
- Analysts maintain “Strong Buy” rating with mean price target of $220.43, suggesting 4.7% upside potential
Alphabet’s Google Cloud division scored a major win with Meta Platforms agreeing to a six-year cloud computing deal worth over $10 billion. The partnership marks a strategic shift as the two tech giants collaborate despite competing in digital advertising markets.
Meta will tap Google’s cloud infrastructure to support its artificial intelligence projects. The deal includes access to specialized AI processors like Tensor Processing Units and GPUs. This comes as Meta prepares to spend between $114 billion and $118 billion on capital expenditures in 2025.
The partnership helps Google Cloud compete more effectively with Amazon Web Services and Microsoft Azure. Google Cloud already showed strong momentum with 32% revenue growth in Q2 2025. The division now holds a backlog exceeding $100 billion.
Meta’s decision reflects the massive infrastructure demands of advanced AI technology. The company is building new AI-focused data centers while also leveraging external partnerships. This dual approach shows how even tech rivals must collaborate to meet AI computing needs.
Strong Q2 Performance Drives Stock Higher
Alphabet delivered impressive Q2 2025 results that beat Wall Street forecasts across key metrics. Earnings per share reached $2.31, surpassing the $2.17 estimate. Revenue climbed 14% year-over-year to $96.4 billion, exceeding projections of $93.9 billion.
The company’s core advertising business continued driving growth. YouTube performance contributed to the strong showing. Google Cloud emerged as a standout performer with revenue jumping 32% to $13.6 billion.
Operating income rose 14% to $31.27 billion. The company maintained a stable operating margin of 32.4%. Google Cloud operating income more than doubled to $2.83 billion, showing improved efficiency at scale.
Free cash flow reached $5.3 billion despite higher capital spending. Capital expenditures surged 70% year-over-year to $22.45 billion. These investments target AI and cloud infrastructure development.
Alphabet closed the quarter with approximately $95 billion in cash and marketable securities. This financial strength supports continued heavy investment in technology. The company raised 2025 capital expenditure guidance to about $85 billion.
Stock Performance Shows Sustained Momentum
GOOGL shares gained roughly 6% over the past five days. The one-month performance shows nearly 10% gains. Over six months, the stock climbed 24%, outperforming the broader market.
The stock has delivered higher returns than the S&P 500 over longer periods. This performance comes with higher volatility than the benchmark index. Recent momentum reflects investor confidence in the company’s AI and cloud strategy.
Wall Street analysts maintain bullish views on the stock. The consensus rating stands at “Strong Buy” based on 54 analyst reviews. This includes 41 “Strong Buy” ratings, four “Moderate Buy” ratings, and nine “Hold” ratings.
The mean price target sits at $220.43, implying 4.7% upside from current levels. This target reflects analyst confidence in the company’s growth trajectory. The Meta cloud deal adds credibility to Google’s competitive position in enterprise services.
Meta’s $10 billion commitment over six years provides Google Cloud with predictable revenue growth and validates its AI infrastructure capabilities against established cloud leaders.
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