Alphabet Inc. Faces Market Challenges Despite Strong Q1 Performance

Based in Mountain View, California, Alphabet Inc. (GOOG) stands as a holding company offering a wide range of internet products including Chrome, Google Cloud, Google Maps, and healthcare services. With a market capitalization nearing $2 trillion, Alphabet operates through segments such as Google Services, Google Cloud, and Other Bets.

Underperformance Compared to Market Trends

Over the past year, Alphabet has notably lagged behind the broader market. GOOG stock has dipped 1.7% over the last 52 weeks, experiencing a significant decline of 14.5% in 2025. In comparison, the S&P 500 Index ($SPX) has gained 11.7% over the same period and registered a 4.7% decline year-to-date (YTD).

Relative Performance Among Peers

Focusing further, GOOG has also underperformed compared to the Communication Services Select Sector SPDR ETF Fund (XLC), which has seen a 22.1% increase in the past year, along with a slight 0.91% dip YTD.

Positive Q1 Results Boost Stock Prices

Following the release of its strong Q1 results on April 24, Alphabet’s stock prices gained 1.5%. The company’s revenue rose by 12% year-over-year to $90.2 billion, driven by robust growth in search, YouTube ads, subscriptions, platforms, devices, and cloud services. Notably, net income soared 46% year-over-year to $34.5 billion, with earnings per share at $2.81, exceeding consensus estimates by 39.1%.

Forecasting Future Earnings

Looking ahead, analysts project that for the fiscal year ending December 2025, GOOG will achieve a 17.3% year-over-year earnings growth to $9.43 per share. The company has a consistent history of surpassing earnings expectations, doing so in each of the past four quarters.

Analyst Sentiment and Price Targets

Analysts have a generally positive outlook for Alphabet, assigning a consensus “Strong Buy” rating. Out of 53 analysts monitoring the stock, there are 42 “Strong Buys,” three “Moderate Buys,” and eight “Holds.” This represents a slightly more bullish stance compared to the prior month’s ratings, which had 40 “Strong Buy” assessments.

On April 25, JP Morgan (JPM) analyst Doug Anmuth retained an “Overweight” rating on GOOG and increased the price target to $195. The mean price target stands at $200.84, indicating a potential upside of 23.4% from current levels, while the highest target of $240 suggests an upside potential of 47.4%.

On the date of publication, Aditya Sarawgi did not have positions, either directly or indirectly, in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.