Globlex Securities noted that Alphabet has reaffirmed its dominant position in the technology sector, with recent performance data characterising the company as the “AI Infrastructure King”. Despite some market volatility surrounding increased spending, financial analysts are advising investors to “buy the dip,” citing a fundamental transformation in how the company monetises its core assets through artificial intelligence.
The 2025 fiscal year marked a historic milestone for the tech giant, with revenue reaching a record $403 billion, an 18% increase year-on-year. Net income saw an even more impressive surge, rising 30% to $34.5 billion. Quarterly results further supported this narrative of growth; Search revenue hit $63.1 billion, and Cloud revenue reached $17.7 billion, both of which comfortably beat consensus estimates. With an earnings per share (EPS) of $2.82—surpassing the anticipated $2.62—it is clear that Alphabet’s AI execution is delivering immediate financial visibility.
A primary driver of this optimism is the evolution of Google Cloud into a high-margin profit engine. Once a loss-making venture, the segment’s operating margin has expanded dramatically from 17.5% to 30%. Cloud revenue grew approximately 48% year-on-year, and the current backlog has more than doubled to roughly $240 billion, indicating strong multi-year demand from enterprise AI clients.
Furthermore, AI is structurally expanding the total addressable market for Search. Through Gemini models, Alphabet has improved query understanding and ad relevance. A significant trend is the rise of multimodal search, with one in six AI Mode queries now being non-text based, which increases user engagement and advertiser return on investment (ROI).
While the market initially reacted with concern to the projected 2026 capital expenditure (CAPEX) of $175 billion to $185 billion, experts view this as a strategic necessity in a supply-constrained environment. This aggressive spending is intended to lock in long-term market share for AI compute and infrastructure.
Consequently, analysts have upgraded their target price to $350 (THB 5.45 for Thai DR GOOG80) and maintained a “BUY” recommendation. As short-term CAPEX concerns fade, the long-term outlook suggests Alphabet is a high-probability winner in the global AI race.
