Alphabet (GOOGL) is delivering impressive growth across its core businesses, thanks largely to its aggressive push into artificial intelligence (AI). For instance, Google’s parent company, Alphabet, delivered better-than-expected second-quarter financial results on Wednesday, July 23. Moreover, it once again achieved double-digit revenue growth across its key segments, including Search and YouTube advertising, Google Cloud, and subscription platforms and devices.
While the company’s fundamentals are strong, Alphabet stock hasn’t fully reflected this performance. With a market capitalization of around $2.3 trillion, GOOGL shares have underperformed the broader market in 2025. Legal and regulatory pressures, combined with intense competition in the AI space, have kept the market cautious. But Alphabet’s long-term AI strategy and its solid execution suggest there may be considerable upside from here.
What sets Alphabet apart is its end-to-end approach to AI. The company has invested heavily across the AI stack, spanning infrastructure and research to products and platforms, which is bearing fruit. It boosts user engagement, expands monetization opportunities, and enhances operating efficiency. In short, AI is now central to Alphabet’s growth narrative, and could push its share price higher.
The benefits of AI integration are evident in Google Search. AI is transforming how people interact with information online, allowing users to ask more complex questions. As a result, search volumes continue to rise. Features like AI Overviews, now reaching over 2 billion users globally, are driving this increased engagement. Meanwhile, the Gemini app, Alphabet’s flagship AI assistant, has attracted over 450 million monthly active users, with daily request volume up more than 50% quarter-over-quarter.
That AI-powered momentum is translating directly into revenue. Google Search and related businesses brought in $54.2 billion in Q2, marking a 12% increase from the year prior. Growth was broad-based, spanning multiple verticals.
Thanks to the AI, Google Cloud is also delivering stellar growth. The unit is witnessing solid product demand. Revenues increased by 32% to $13.6 billion in Q2, driven by growth in Google Cloud Platform (GCP) across core and AI products.