Google's Q2 25 Triumph, The Best Value Magnificent 7 Stock Shining Bright

🌟🌟🌟As a long term investor in$Alphabet(GOOGL)$  $Alphabet(GOOG)$  I am so happy with its latest Q2 25 results which was released today.  Google not only beats revenue and earnings estimates but did so while trading at a forward P/E ratio of just 17.8 times, well below its Big Tech peers.  For value minded investors like me who seek exposure to AI, Cloud and Digital dominance, this quarter's results make a compelling case of why I invest in Google.

Q2 25 Financial Highlights 

Revenue is up 14% YoY to USD 96.4 billion vs USD 94 billion estimates

EPS is USD 2.31 vs USD 2.18 estimates 

Forward P/E ratio is 17.8 times vs Nvidia at 50 times, Meta at 23 times and Microsoft at 25 times.

Share Performance and Analyst Sentiment

Google $Alphabet(GOOGL)$  closed at USD 190. 23 today and is up 1.9% in after hours trading.  Google is up only 0.4% year todate and 4.6% in the past year.  However in the past 5 years, Google has skyrocketed by 152%.

Wall Street Analysts remain cautiously optimistic with a Buy rating, consensus target price of USD 201, an upside potential of almost 6%.

Growth Drivers : Segment Breakdown

Search and Ads: USD 54.1 billion in revenue, beating forecasts on resilient ad demand.

YouTube Ads : USD 9.79 billion, reflecting continued monetisation gains.

Google Cloud : USD 13.6 billion, up 32% year over year.

AI integration across products is accelerating customer adoption and pricing power. 

Profitability and Long term Investments 

Net Income : USD 28.2 billion, up 19% year over year.

Operating Margins : 32.4% even after ramping up capex to USD 85 billion to scale AI infrastructure.

Those investments may temper free cash flow in the near term but they will help to solidify Google's leadership in AI computing and data center innovation.

Capex Surge: USD 85 billion Investment for the future growth 

Google's 2025 capital expenditure outlook jumped to about USD 85 billion.  This is USD 10 Billion more than its prior forecast of USD 75 billion, a 13% rise that initially worried investors.  The increase in capex is squarely aimed at expanding data centers, deploying next generation TPU and GPU clusters as well as strengthening networking and server capacity in order to meet surging enterprise demand for AI and cloud services. 

While higher capex may affect near term free cash flow, Google's fortress balance sheet and massive cash flow generation mitigate those concerns.  This is especially so given that these investments underpin future revenue growth and market share in the fast growing AI /cloud sector. 

Regulatory and Other Bets Overhang 

Antitrust risk -  Potential Chrome searching rules could force divestitures or restrict default agreements, posing a short term headwind. 

Other Bets - Continued losses such as in Waymo and Verily temper overall profitability. 

Concluding Thoughts - Google is a value gateway into Big Tech 

Despite regularity uncertainties and record setting capex, Google's Q2 performance underscores its unmatched scale, AI momentum and disciplined cost management. 

Trading at the cheapest valuation among its elite peers, Google offers a rare entry point into a great company that continues to innovate at the frontier of AI,  cloud and advertising. 

For investors seeking quality, growth and a margin of safety, now maybe the perfect time to add Google to your portfolio, securing tomorrow's market leadership at today's value. 

As Warren Buffett likes to say  "Price is what you pay, value is what you get".  It is a principle that encourages focusing on the underlyg value of an asset rather than just its price. 

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