Alphabet Inc. (NASDAQ:GOOGL) is one of the Best Cloud Computing Stocks to Invest in Now. On August 6, LivePerson announced the significant expansion of its partnership with Google Cloud to integrate its advanced AI capabilities directly into LivePerson Connected Experience Platform. The brands are expected to benefit from improved self-service and personalization capabilities, deeper insights into customer sentiment, as well as access to the latest large language models.
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
In Q2 2025, Alphabet Inc. (NASDAQ:GOOGL)’s consolidated revenues rose 14%, or 13% in constant currency, YoY to reach $96.4 billion, reflecting strong momentum throughout the business. Furthermore, Google Cloud revenues rose 32% to $13.6 billion, thanks to the growth in Google Cloud Platform throughout core GCP products, AI Infrastructure, and Generative AI Solutions. Overall, AI has been positively impacting every part of Alphabet Inc. (NASDAQ:GOOGL)’s business, fueling strong momentum.
Google Cloud operating income rose to $2.8 billion, with operating margin increasing from 11.3% to 20.7%. The expansion in cloud operating margin was backed by healthy revenue performance and continued efficiencies in the expense base, partially mitigated by increased technical infrastructure usage costs, including associated depreciation. Amidst increased AI investments, the focus remains on fueling improvements in productivity and efficiency to offset the growth in technical infrastructure-related expenses.
Oakmark Funds, advised by Harris Associates, released its Q2 2025 investor letter. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. The U.S.-headquartered technology company’s stock price rose relatively steadily throughout the period after it delivered solid first-quarter 2025 earnings and mega-cap tech stocks trended higher. Despite concerns around incremental competition, Google Search revenue grew low-double digits and was slightly ahead of consensus forecasts. Operating income was also ahead of expectations, with Alphabet improving margins even as the company continues to make substantial investments in AI. We believe the potential payoff from these investments across each of Alphabet’s business units remains underappreciated. After adjusting for the value of Google Cloud and Alphabet’s Other Bets, we believe the Search, YouTube and Android businesses are being valued at a low-teens price-to-earnings (P/E) multiple. We still see this as an attractive valuation.”
While we acknowledge the potential of GOOGL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GOOGL and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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