After dealing with some headwinds earlier this year, stemming from intensifying artificial intelligence (AI) competition and regulatory hurdles, Alphabet (GOOG) (GOOGL) is once again flying high in 2025. A major reason for this renewed excitement is the debut of Gemini 3, its most powerful large language model (LLM) to date, which arrived last month and is already being viewed as a serious challenger to OpenAI’s ChatGPT.
At the same time, demand for Google’s custom-built AI chips is heating up, with several major industry players lining up for access. Together, these rapid-fire AI developments are helping Google remind the world that when it comes to innovation, it’s still one of the biggest forces in tech and definitely not a company to underestimate. And Wall Street seems to agree.
In fact, Google’s stock just earned a bullish thumbs-up from Pivotal Research, which believes shares could climb all the way to $400 in the coming months, pointing to AI momentum and steady growth across Google’s core business operations. So, with investor excitement building and Google rolling out breakthroughs at record speed, could this tech giant soar to that new Street-high target in 2026?
Founded in 1998, Google barely needs an introduction. After all, most of us interact with it multiple times a day without even thinking about it. From Google Search and YouTube to Maps, Gmail, Android, and the ever-useful cloud services, Google has become the digital backbone of modern life. And now, the California-based tech giant is pouring that same ambition into AI. Its newly launched Gemini 3 is considered the company’s most advanced LLM yet, with some voices even calling it the strongest AI model out there.
At the same time, Google Cloud is becoming a busy hub for AI development, and demand for its in-house AI chips is starting to challenge chip giant Nvidia’s (NVDA) long-standing grip on the GPU market. In fact, while EV king Tesla (TSLA) has been betting on AI-powered robotaxis for years, Google is actually ahead even in this race, with its Waymo division already operating autonomous ride-hailing services across multiple cities.
Altogether, these rapid advances show just how aggressively Google is expanding its reach across the AI landscape. And that’s despite starting 2025 on the back foot, with investors initially worried that Google was falling behind in the intensifying AI race. In fact, Google’s market valuation is now hovering near an eye-popping $3.9 trillion, putting it firmly among the most valuable companies in the world.
Even more impressive, the stock has been the top performer within the elite “Magnificent Seven” this year, soaring 65.3% in 2025 alone. To put that into perspective, Google isn’t just beating its tech-mega-cap peers. It’s also far outperforming the broader S&P 500 Index ($SPX), which is up a modest 16.19% during the same period. The tech giant also achieved a fresh 52-week high of $328.83 last month and is only down about 5% from that peak.
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Google unveiled its fiscal 2025 third-quarter earnings on Oct. 29, and the results blew past Wall Street’s expectations on both the top and bottom lines. Revenue jumped 16% year-over-year (YOY) to $102.3 billion, easily beating forecasts of $100.1 billion. The surge was powered by a 14% rise in Google Services revenue to $87.1 billion, thanks to strong contributions from Search, YouTube ads, subscriptions, platforms, and devices.
Search continued to flex its dominance with revenue up 14.6% YOY to $56.6 billion, while total Google advertising revenue climbed 12.6% YOY to $74.2 billion. Google Cloud was another bright spot, posting a powerful 34% revenue increase to $15.2 billion, reflecting growing demand for enterprise cloud and AI workloads. The company also delivered solid profitability. Operating income rose 9% to $31.2 billion, with an operating margin of 30.5%.
That figure would have been close to 34% if not for a $3.5 billion antitrust penalty from the European Commission (EC). Additionally, earnings-per-share (EPS) impressed, coming in at $2.87, up 35.4% YOY, and ahead of analyst expectations by roughly 27% margin. The company highlighted momentum from its “full-stack approach to AI,” noting that first-party models such as Gemini now process a staggering seven billion tokens per minute, while the Gemini app has already surpassed 650 million monthly active users.
Further, management shared another eye-catching data. Google Cloud backlog orders have now topped $155 billion, reflecting intensifying demand for both cloud and AI solutions. Looking ahead, Google left little doubt about where it’s heading next. Management guided fiscal 2025 capital expenditures to $91 billion–$93 billion, underlining continued investment in AI and infrastructure.
Recently, Pivotal Research boosted its price target on Google to $400 from $350, while sticking with its “Buy” rating and pointing to solid momentum across Google’s core business units. Pivotal describes Google’s search franchise as a “resilient cash cow with pricing power,” and one that also fuels the company’s Gemini AI platform.
The firm argues that, as Gemini takes share in search, Google could see better economics with device makers than with traditional search partnerships, potentially leading to more substantial margins. And, Pivotal believes Gemini is on track to gain share against OpenAI, with Google’s growing AI relationship with Apple (AAPL) serving as a catalyst.
According to the firm, this shift could start putting pressure on OpenAI by 2026, possibly forcing it to scale back spending due to “massive obligations and likely falling OpenAI share.” On the hardware side, Pivotal highlights Google’s custom-built AI chips, the Tensor Processing Unit (TPU), as a meaningful and lasting competitive edge. The research firm says TPUs could become a powerful value driver if Google successfully sells them to other companies, and might even help the company grab market share directly from Nvidia.
Overall, Wall Street’s confidence in Google remains sky-high. The stock currently sports a consensus “Strong Buy” rating, and the analyst breakdown makes that optimism crystal clear. Out of 54 experts covering the company, 43 rate it a “Strong Buy,” another four call it a “Moderate Buy,” and only seven are sitting on the sidelines with a “Hold.”
And while the average price target of $324.88 points to only modest upside of almost 4% from here, Pivotal Research’s Street-high $400 target implies Google could still climb roughly 21.5% from current levels.
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On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
