Alphabet, the parent company of Google, is set to report its second-quarter earnings on Wednesday (July 23), and investors are paying close attention this time around. The company’s stock looks attractively priced right now—it has the lowest future price-to-earnings (P/E) ratio compared to the other big tech companies among the “Magnificent Seven.” This has renewed interest among traders.
Recently, several analysts upgraded their outlook on Alphabet, expecting strong performance in the second half of 2025. According to eToro analyst Josh Gilbert, the company is focusing heavily on artificial intelligence (AI). “Alphabet is continuing to invest heavily in Gemini, its flagship AI assistant, as well as AI-powered ad products and enterprise tools,” he added.
Investors are particularly interested in how Gemini will be used across Google’s major platforms, including Search, Workspace (like Gmail and Docs), and Cloud. Gilbert says updates in these areas could be a big deal this quarter.
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Concerns over Google search’s dominance
However, there are some concerns. Some investors worry that AI tools like ChatGPT and the rise of platforms like TikTok—where younger users now search for information—could eventually hurt Google Search’s dominance.
Alphabet is also facing legal pressure. A U.S. judge is expected to rule on possible changes to Google’s business structure due to an antitrust case involving Google Search.“Talks of a potential forced divestment of Chrome could pose a serious challenge to Alphabet’s search ecosystem. Until more clarity emerges, some investors will remain on the sidelines,” Gilbert noted.
Eye on could & AI spending
Another important topic is how much Alphabet is spending. As tech companies race to build out AI infrastructure, Alphabet’s capital spending could increase, especially if demand keeps rising.
Finally, all eyes are on Google Cloud. It’s one of the company’s fastest-growing segments, with expected growth of around 27% this quarter. If results are strong here—and in Search—the stock could rally after the earnings report.
