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# Alphabet Q2: AI Search & Cloud Doing Great, But Be Wary Of ROI On Big Capex Spends (Archive)
- URL: https://www.huntingalphas.com/alphabet-q2-ai-search-cloud-doing-great-but-be-wary-of-roi-on-big-capex-spends-archive-copy/
- Published: 2025-07-24T12:57:00.000Z
- Updated: 2026-02-28T18:23:25.000Z
- Description: AI-powered Search and Cloud are thriving, but escalating capex demands clear evidence of ROI.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, GOOGL, Communication Services

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- Alphabet's Q2 FY25 results reinforce my bullish stance, driven by AI-led growth in Search that is leading to strong user engagement and importantly, higher ad conversions.
- Google Cloud is showing signs of accelerated growth, evidenced by a surge in high-value deals and a robust backlog, supporting future revenue expansion.
- GOOGL stock remains undervalued versus peers and its own historical multiples.
- The relative technical charts in GOOGL vs SPX500 give me further confidence of continued outperformance and hence alpha generation potential ahead.
- Increased capex guidance comes at the cost of FCF margin dilution in the near-term. We need to be demanding proof of ROI via accelerated revenue growth in every call and interview with management.

Read the full article [here](https://seekingalpha.com/article/4803854-alphabet-q2-ai-search-and-cloud-doing-great-but-be-wary-of-roi-on-big-capex-spends?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*