Alphabet Stock Soars: Here’s Why Google’s Parent Company Just Rocketed Higher

Alphabet shares just ripped higher—and the market's buzzing about what's fueling this tech giant's sudden surge.

The AI Arms Race Heats Up

Google's parent company isn't sitting idle while rivals chase the next big thing. Fresh developments in artificial intelligence and cloud infrastructure are driving renewed investor confidence—because nothing gets Wall Street excited like the promise of future dominance.

Search Still Prints Money

Despite existential threats from every direction, Google's core advertising business continues to generate staggering cash flow. Sometimes the old tricks still work best—even if analysts pretend to care about 'innovation' while secretly loving predictable revenue.

Regulatory Winds Shift

Potential regulatory relief on the horizon has traders betting that Alphabet might finally catch a break from constant antitrust scrutiny. Because in modern finance, not getting punished is often as good as actually innovating.

Alphabet proves that even tech behemoths can still surprise—or maybe investors just realized that betting against Google is like shorting the internet itself.

Image source: Getty Images.

What Citi says about Google

Alphabet stock jumped 3% through 11:10 a.m. ET this morning, and the major catalyst behind the MOVE was this: As TheFly.com reports today, Citi raised its price target on Alphabet stock to $280 a share, a 24% increase that implies the stock could rise another 12% over the next 12 months.

And why did Citi do this? Because artificial intelligence (AI), that's why.

Citing "greater regulatory clarity," says Citi, Alphabet says it will release new products more quickly than in the past, building on its dominant position in internet advertising. In particular, Citi's looking to see Alphabet roll out its Gemini AI product across all the company's advertising and cloud businesses, capitalizing on its investments in AI.

Is Alphabet stock a buy?

Investors had better hope Citi is right, because the investments that Alphabet has made in artificial investments have been truly massive -- and very expensive.

According to data from S&P Global Market Intelligence, since OpenAI released ChatGPT in late 2022, Alphabet's capital spending (on chips and server farms and other AI infrastructure, primarily) has more than doubled. Over the last 12 months, Alphabet's spent a staggering $67 billion on capital expenditures, such that today, roughly half the company's operating cash FLOW is immediately consumed by capex.

Result: Free cash Flow at the company grew just 11% total over the last three years.

Right now, Alphabet may be a leading AI company. I won't argue that. But it's hard to call Alphabet a growth stock anymore, and until that changes, I'm not at all certain Alphabet stock is a buy.