Not only is Alphabet‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) core business already throwing off tons of cash, but it has a second growth engine that is quickly morphing into a separate material cash machine for the company. When combining this fast-growing cloud computing business with Alphabet’s core advertising business (powered by Google Search and YouTube), the technology giant has a lot going for it. Indeed, there may even be a path to the stock doubling in five years — and that’s on top of a huge move higher in 2025.
To understand why a doubling of Alphabet’s stock price by 2030 is possible, let’s take a look at the company’s underlying business momentum — and what would need to go right in the coming years for the stock to get to levels above $600.
Image source: Getty Images.
Showing Alphabet’s impressive momentum, its growth has been accelerating recently. Its revenue grew revenue 14% year over year in the second quarter of 2025, and then 16% in Q3.
But the tech company‘s bottom-line momentum is even more impressive. Alphabet’s third-quarter net income hit $35.0 billion, up from $326.3 billion in the year-ago quarter. And earnings per share rose more than 35% year over year.
Of course, aggressive share repurchases have played a key role in the company’s outsize earnings-per-share growth relative to its top-line growth. And investors are likely pleased with the company’s still-young but growing dividend; in Q1, Alphabet’s board approved a 5% dividend increase and a new $70 billion repurchase authorization.
This business momentum, even as the company returns huge sums of capital to shareholders, helps explain the stock’s significant move higher this year. Shares have gained an extraordinary 62% year to date.
Alphabet’s main catalyst to watch over the next five years, in addition to an already strong core advertising business, is its cloud computing business, Google Cloud. The segment’s revenue rose 34% year over year in Q3, hitting $15.2 billion (about 15% of the quarter’s total revenue).
Even more, the segment is proving to be quite lucrative. Google Cloud operating income in Q3 was $3.6 billion, up about 85% year over year.
If this segment grows as a percent of overall revenue and continues to become more profitable as it scales, it could provide a substantial boost to the company’s overall profits in the coming years.
But this buildout will cost a lot of money. Management recently raised its 2025 capital expenditures outlook, saying that it now expects to spend between $91 billion $93 billion in capital expenditures in 2025. Spending like this will likely pressure free cash flow in the near term, making it critical that Alphabet’s big investments eventually pay off.
With this background on the company’s momentum in mind, here’s the simple math behind a potential double for the stock.
If Alphabet trades at about a price-to-earnings ratio of about 25 in 2030 and the stock price is trading at approximately $614 (compared to its current price of about $307), annualized earnings per share would need to be near $24.60.
That implies earnings per share a bit more than doubling from where it sits today on a trailing basis (Alphabet’s trailing-12-month earnings per share currently stands at $10.13), and it works out to something like high-teens annual growth over five years.
To achieve this, revenue needs to keep growing at a rate similar to what it has been, and expenses need to rise more slowly than sales. Further, repurchases need to keep chipping away at the share count.
Given how much AI has been catalyzing Alphabet’s business recently, these assumptions seem plausible.
Of course, there are some critical risks. AI could reshape search monetization faster than Alphabet can adapt. Additionally, regulators can force changes that reduce pricing power in ads or make distribution more expensive. Finally, the capital spending cycle for the company to capture its growth opportunities in AI looks like it’s going to be intense.
In short, it’s possible — and arguably even likely — that Alphabet’s stock doubles by the end of 2030. However, investors will need to continually assess the ever-changing risks, particularly given the capital-intensive nature of the company’s cloud computing business. If these big investments pay off in even faster revenue growth and margin expansion over time, the stock could easily double. But if strong growth from these investments is never realized, investors may need to reassess the bull case.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
