24 July 2025
If you are covering Alphabet’s latest financial results, please find below a comment from Ben Barringer, head of technology research at Quilter Cheviot:
“Given the concerns around disruption from artificial intelligence and Chat GPT, Alphabet produced a really good set of numbers in its latest results. Revenues were up 15%, three percentage points better than expected and the search business delivered at the top of its range. The cloud business, meanwhile, was also a strong performer with revenues up 32% so it is encouraging to see the business growing strongly in the face of pressures.
“Alphabet recognises it has the chance to be disrupted too and has increased its capital expenditure guidance from $75bn up to $85bn. This is a very solid raise and should be viewed as a positive, with investment looking to drive away the threat of Chat GPT. Alphabet has been playing catch up somewhat in the AI arms race, but it is doing well to fend off the likes of Chat GPT. The big question will be whether it can keep innovating at a pace that allows it to maintain its search monopoly. This boost in investment suggests the fight will continue.
“The next big event on the horizon now is the Department of Justice’s ruling next month and how it will impact the potential breakup of the business. While it is unlikely to be the end of the saga regardless of the result, any indication that its search monopoly will weaken will not be taken well by the market, especially given the AI threat currently. This ruling has the potential to either be a clearing event or add to Alphabet’s uncertainties. Investors remain very much in wait and see mode as a result and will remain cool on the stock until that ruling makes it clear what the next steps are.”
