How I Made $5000 in the Stock Market

Alphabet Stock’s 2025 Rebound Has Wall Street Betting on More Gains

Dec 29, 2025 15:31:00 -0500 by Angela Palumbo | #Technology

Alphabet stock has risen 65% in 2025. (TOBIAS SCHWARZ/AFP via Getty Images)

Key Points

Alphabet stock has staged a major comeback in 2025, and Wall Street expects the gains to continue into the new year.

The year began with uncertainty for the search giant. Investors worried about the fallout from a major antitrust case, intensifying competition in search, and Alphabet’s commitment to heavy spending on artificial intelligence. The stock hit a 52-week closing low of $144.70 on April 8.

Shares have since risen 116% from that low. The stock is now up 65% in 2025, outperforming its Magnificent 7 peers.

The Mag 7 is a group of technology stocks that Wall Street expects will benefit most from the expansion of AI. Of these stocks, Nvidia has jumped 39% this year, Tesla has gained 16%, Microsoft has risen 15%, Meta Platforms has increased 12%, Apple has climbed 9%, and Amazon.com is up 5.5%.

It wasn’t an easy ride for Google to get to this point.

A federal judge said in August 2024 that Google maintained a monopoly in general search services and general text advertising. Wall Street was nervous that the judge would require Google to sell its Chrome browser and stop the company from paying to make Google the default search provider on Apple devices. Instead, the judge laid out a seemingly limited set of remedies to mitigate the monopoly in September, boosting investor sentiment.

Search competition was another fear among shareholders. Other companies like OpenAI, Perplexity, and Microsoft are just a few that have launched their own AI chatbots, which allow for more conversational and personal answers to users’ search queries.

Google hasn’t sat around and waited for competition to take market share from search. It’s launched AI Overviews—AI-generated answers that appear at the top of Google’s search page—and AI Mode—an AI search feature that provides longer, more personalized responses to Google searches. Wall Street analysts have recently pointed to continued increases in search engagement for Google, driven by these AI initiatives.

“There was almost a universal consensus that while still not out from the threat of the rise of ChatGPT, Alphabet is in a far better spot than it was at this time last year,” Moffett Nathanson analyst Michael Nathanson wrote in a note on Dec. 22. “Google’s traditional search continues to hold strong in the presence of the LLMs.”

Alphabet has also committed to spending massive amounts to continue building out its AI presence. Some investors are concerned that tech companies are spending too much, but haven’t yet seen tangible returns on those investments. Fears about a possible AI bubble have caused some tech stocks to drop from their highs this year. Alphabet is bucking the trend.

“The sharp Capex ramp only adds fuel to the AI demand trade. With Gemini deployment broadening and AI-driven productivity visible across segments, Google is turning scale into sustained competitive advantage,” Nancy Tengler, CEO and CIO at Laffer Tengler Investments, wrote on Monday.

Analysts think Alphabet stock has even more room to run. Of the 76 analysts surveyed by FactSet, 64 say the stock is a Buy, 12 say the stock is a Hold, and none rate it a Sell. The average price target for the stock is $334.50, which implies a 6.7% increase from the last closing price of $313.51.

The stock is more expensive than usual, though. Shares are trading at 27.8 times expected earnings over the next 12 months—above their five-year average of 21.7 times and well above the 2025 low of 15.5 times hit on May 7.

Write to Angela Palumbo at angela.palumbo@dowjones.com