Analysts at Needham, led by Laura Martin, raised their revenue estimates for Google (GOOGL) due to the tech giant’s growing cloud business. The analysts now expect fourth-quarter revenue to come in at $96.4 billion, versus the consensus estimate of $96.62 billion, which equates to a year-over-year growth rate of 12%. This increase is primarily due to the strength of Google Cloud, with estimates pegging its revenue at $12.1 billion for the quarter.
Unsurprisingly, Google’s traditional business segments continue to dominate the market. Indeed, the firm saw over $260 billion in global ad revenue in 2024, which accounted for more than 40% of global digital ad spending. Meanwhile, YouTube remains the most-streamed site in the U.S. and the largest social video advertising site. In addition, generative artificial intelligence is expected to further boost revenue for Google Cloud thanks to the use of large language models and related applications.
Needham also increased its full-year revenue estimates for Google by predicting $390.2 billion in revenue for Fiscal 2025 and $435.8B for Fiscal 2026. As a result, the firm raised its price target for Google to $225 from $210. Interestingly, Needham believes that the company’s value could potentially increase even if the U.S. Department of Justice is successful in breaking up Google. Google is set to report its fourth-quarter results on February 4.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 24 Buys and seven Holds assigned in the past three months. After a 26.6% rally in the past 12 months, the average GOOGL price target of $218.46 per share implies 12.8% upside potential from current levels.