Capital spending by technology giants remains top of mind for investors following earnings reports from Google-parent Alphabet (GOOGL), Amazon.com (META), Meta Platforms (META) and others. Google stock has retreated about 10% since the company’s fourth quarter earnings report on Feb. 4.
The impact of generative artificial intelligence on the internet search advertising business of Google stock also remains the key issue for investors. Also, antitrust lawsuits filed by the Department of Justice have pressured Google stock. Both Google’s internet search and advertising businesses are under DoJ scrutiny.
Trump Picks Top Antitrust Official
Further, President Donald Trump has nominated Gail Slater for the top antitrust post at the Justice Department. Wall Street analysts haven’t had much to say on Slater’s appointment. Slater will report to Attorney General Pam Bondi.
As assistant attorney general for the antitrust division, Slater would oversee ongoing cases versus Google, Apple (AAPL) and other the companies.
One view had been that a Trump DoJ may be more open to a settlement than the Biden administration or seek lighter penalties.
In a U.S. Senate confirmation hearing, Slater said that “resources” will be a factor in pursuing the cases.
Slater most recently was a policy adviser for Vice President JD Vance. Earlier, she worked at Fox (FOXA) and Roku (ROKU). Her government career includes 10 years at the Federal Trade Commission.
Meanwhile, Google stock fell on its Q4 earnings report amid higher-than-expected 2025 capital spending.
“Advertising revenues were ahead of expectations, but Google Cloud was soft, operating income was in line and 2025 capex was well above Wall Street estimates,” said Mizuho Securities analyst James Lee in a report.
Like Alphabet, Amazon and Meta as well as Microsoft (MSFT) plan to continue high capital spending amid fierce competition in artificial intelligence. The emergence of Chinese startup DeepSeek has roiled artificial intelligence stocks.
Google Stock: Winning Back Investors
Overall, Google stock has retreated about 2% in 2025. Shares trade below the 50-day moving average of Alphabet stock.
Chief Financial Officer Anat Ashkenazi will take part in a Morgan Stanley conference on March 4.
Amid U.S.-China trade friction, China’s State Administration for Market Regulation, the nation’s antitrust agency, announced it had opened an antitrust investigation into Google. The probe will reportedly focus on possible harm done against Chinese OEMs that use Google’s Android operating system.
Also, Google stock has dropped off the IBD Leaderboard. Also, Alphabet’s technical ratings have weakened and it continues to under-perform some Magnificent Seven stocks.
AI Search Competition Growing
Generative AI startup OpenAI’s ChatGPT has been slowly gaining search market share. ChatGPT delivers answers to search queries while Google’s business model has been based on providing web links. Also, startup Perplexity is another new rival.
Google is competing with OpenAI, Facebook-parent Meta and many others in building new foundation models. In December, Google unveiled its new artificial intelligence model, Gemini 2.0.
Google began deploying AI Overviews in the U.S. in mid May, with conversational summaries topping links for many search queries. In late October, Google launched AI Overviews in 100 countries
The AI Overviews system uses Google’s in-house Gemini AI model. Advertisers utilizing Gemini AI tools see increased traffic and click-through rates, especially among younger demographics, Google says.
In December, Google announced the Willow quantum computing chip. Google has been a leader in quantum research. But quantum technology faces challenges.
GOOGL Stock: Waymo Expands
Meanwhile, Waymo on Dec. 5 announced that the company plans to expand its autonomous vehicle rideshare service to Miami in 2026. The Waymo One robotaxi service currently operates in Phoenix, San Francisco, and Los Angeles, with upcoming service already planned for Austin, Tex. and Atlanta. In Miami, Waymo will compete with Uber Technologies (UBER) and other rideshare services. In Austin and Atlanta, Waymo is partnering with Uber.
Meanwhile, Waymo also disclosed that it has reached 150,000 trips per week, rapid growth from August levels at 100,00 per week. Waymo is widely viewed as the leader in autonomous vehicles. In October, Waymo closed a $5.6 billion funding round, including Google and previous investors. If Wall Street analysts start including Waymo in Alphabet’s valuation, it would be a big development.
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Google Stock: YouTube, TikTok
Also, analysts say GOOGL stock is getting a boost from the Performance Max advertising platform. It automates buying across YouTube, internet search, display, Gmail, maps and other applications. Performance Max lets advertisers manage campaigns across all Google ad inventory.
Aside from Google’s core internet search advertising business, Wall Street analysts view growth at YouTube and cloud computing as key. Another question is the performance of Google’s hardware business, where it’s battling Apple in smartphones.
Google aims to slow down the growth of TikTok with its own short video platform. How much money Google generates from YouTube Shorts is a key issue for 2024, analysts say. YouTube Shorts now generates roughly 70 billion daily views.
In cloud computing, Google is still the third biggest service provider, behind Amazon.com (AMZN) and Microsoft. Like Amazon Web Services and Microsoft’ Azure business, Google’s cloud unit has upped capital spending targeting the new opportunity in generative AI.
Google’s 2022 acquisition of cybersecurity firm Mandiant for $5.4 billion seems to be paying dividends. Mandiant is part of Google’s cloud-based cybersecurity services.
GOOGL Stock: Is It A Buy Or Sell Now?
GOOGL stock popped 37% in 2024, though it pulled back from a high of 201.42 set on Dec. 17.
Whether the internet giant is a buy depends on fundamental and technical factors as well as each investor’s own goals, strategy and risk tolerance.
Also, the Relative Strength Rating of Alphabet stock currently stands at 77 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better.
Google stock holds an Accumulation/Distribution Rating of D-plus. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Further, Alphabet stock holds an IBD Composite Rating of 95 out of a best possible 99. IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.
On MarketSurge, GOOGL stock has retreated back into a buy zone. But investors should be cautious. And, long-time holders could take profits.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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