GOOGL shares head to record high: AI investments doubled!

GOOGL shares head to record high: AI investments doubled!

Alphabet (GOOG) shares rose 2% to $177.99 on Wednesday. The catalyst for this positive trend was confirmation from an executive who announced that the company would double its investments in artificial intelligence (AI), particularly in technical infrastructure. This move comes after GOOGL posted losses in the last two trading periods. Analysts are bullish as the average rating of 55 analysts for GOOGL is “BUY” and the median price target is $200. Still, the stock is down 6.1% for the year, while the NASDAQ Composite Index (IXIC) is up 6.4%. [Tradingview] reports on the developments and market reaction.

Eunice Huang, Google APAC Head of AI and Emerging Tech Policy, expressed concerns about the risks of underinvesting in transformative technologies, which she said are higher than the risks of overinvesting. Back in April, GOOGL announced it would invest $75 billion this year to expand data center capacity, underscoring the importance of infrastructure for future AI initiatives.

Strong quarterly numbers and AI progress

In the first quarter of 2025, Alphabet was able to present strong figures, recording a jump in profits and strong sales growth. Advances in artificial intelligence are a key topic as they are seen as a driver for future growth. At the same time, however, analysts are expressing concerns about advertising demand in a potentially weaker economic environment. Nevertheless, Philipp Schindler, Chief Business Officer at Google, is optimistic about demand in the insurance, retail and travel sectors. However, a possible tax change in Asia could bring slight headwinds.

The company highlights progress in its AI offensive, particularly with the new “Gemini 2.5 Pro” model. CEO Sundar Pichai highlights the positive feedback from developers and users. The new AI Overviews in Google Search already have over 1.5 billion monthly users, demonstrating the widespread acceptance of this technology.

Monetization prospects and future outlook

Pichai describes AI Overviews as one of the most revolutionary technologies for Google's information mission, as users formulate their queries in AI mode on average twice as long as with classic search queries. However, Schindler expresses concerns about monetization and click behavior on AI Overviews, without mentioning specific click rates or conversion rates. Despite these challenges, Alphabet remains financially sound and is expected to continue to be viewed as a staple investment in the tech sector. [The shareholder] adds that these developments leave Alphabet in a strong position for future market leadership.