TLDR
- Alphabet stock jumped 14% in September 2025, driven by easing regulatory concerns and continued strong search performance
- A judge ruled against breaking up Alphabet, rejecting the Department of Justice’s proposal to split off Google Chrome
- Google Search revenue grew 12% year-over-year in Q2, dispelling fears that AI-powered search engines would disrupt the business
- BMO Capital raised its price target for Alphabet to $294 from $225, citing AI leadership in Search and Google Cloud Platform
- Alphabet trades at a lower forward P/E ratio than big tech peers despite posting 14% revenue growth and 22% EPS growth
Alphabet stock delivered its strongest monthly performance in years during September 2025. The stock climbed 14% throughout the month.
For a company valued near $3 trillion, that kind of movement gets attention. But the reasons behind the rally matter more than the numbers themselves.
Two major concerns that weighed on Alphabet stock earlier this year have now been resolved. First, a judge ruled against breaking up the company. The Department of Justice had pushed to split off Google Chrome as a remedy for alleged monopoly practices in the search engine market.
The judge rejected that proposal. Instead, Alphabet was forced to make some operational changes but will largely continue operating as it does today.
That ruling came as a relief to investors who worried about what a dramatically restructured Alphabet might look like. The uncertainty has cleared.
The second concern involved competition from AI-powered search engines. Many analysts predicted these new tools would steal market share from Google Search. That hasn’t happened.
Google Search revenue grew 12% year-over-year in Q2 2025. Those numbers don’t reflect a business under threat.
Part of that resilience comes from Google’s own AI integration. The company rolled out AI search overviews, which provide AI-generated summaries at the top of search results. This feature has become popular with users.
AI Leadership Drives Price Target Increases
BMO Capital recently raised its price target for Alphabet to $294 from $225. The firm maintained its Outperform rating.
The analyst cited Alphabet’s AI leadership as a key driver. That leadership is showing up in both Search and Google Cloud Platform performance.
BMO Capital increased its third quarter revenue estimates by 1.2%. Fourth quarter estimates went up 1.5%.
The firm continues watching the Ad Tech Remedies trial. However, analysts believe a structural breakup remains unlikely.
Alphabet currently trades at $242.58. That puts it close to its 52-week high of $256.
The stock has surged 54% over the past six months. That momentum reflects growing confidence in the company’s AI strategy.
Valuation Gap Creates Opportunity
Alphabet posted 14% revenue growth and 22% earnings per share growth in its most recent quarter. Those are solid growth numbers for any tech company.
Yet Alphabet trades at a lower forward price-to-earnings ratio than most of its big tech peers. The valuation gap is hard to ignore.
Investors can buy faster growth at a cheaper price with Alphabet compared to other options. That combination doesn’t come around often.
The company’s Gemini AI platform continues ranking as one of the top-performing generative AI models. With its integration into Google Search, Gemini has become the most widely used AI model.
Alphabet has also announced several recent initiatives. Google launched Gemini Enterprise to enhance workplace productivity. The platform connects to company data and workflows through a conversational interface.
The company plans to invest $10 billion in a data center cluster in India. That facility is expected to be operational by July 2028.
Google expanded its AI Plus subscription plan to 36 additional countries. The service now reaches 77 countries total.
Google also introduced new programs to support small businesses with AI training and funding. These moves demonstrate the company’s commitment to making AI accessible across different market segments.
The stock currently trades at $242.58 after climbing more than 50% over six months.
