Google struggles below $350 as TPU monetization becomes the next growth test

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Google tests support as momentum fades

TPU commercialization opens a new revenue opportunity

From a fundamental perspective, a new factor is emerging for Alphabet that the market is gradually beginning to assess separately from Search and Gemini. Increasing attention is shifting toward the external commercialization of its proprietary TPUs and how quickly this business can become an independent source of revenue.

The potential here is significant, as Google is effectively trying to turn an internal infrastructure development into a separate business capable of competing for a share of corporate AI budgets. The other side of this story is that scaling computing infrastructure requires further growth in capital expenditures, so the market is now watching not only the pace of Cloud expansion, but also how efficiently these investments are converted into profit.

Cloud remains the key proof point for AI spending

The main test of this model continues to come through Google Cloud. In the latest reported quarter, its revenue rose 82% to $24.8 billion, while contractual backlog approached $514 billion. Alphabet’s consolidated revenue reached $119.8 billion, Search grew 17%, and YouTube advertising increased 13%, so there are still no signs that the spread of AI search is undermining Google’s advertising economics.

On the contrary, investors are trying to understand how quickly the company can monetize Gemini, enterprise AI services, and its own accelerators at the same time. The next earnings report will be an important point for reassessing this story, with the market likely to focus particularly closely on Cloud, capex, and comments on further monetization of AI infrastructure.

Regulatory pressure limits the upside

The main negative factor remains regulatory risk. Changes surrounding Google’s advertising infrastructure are increasing uncertainty over the future profitability of the ad-tech business and could gradually weaken the advantages of the company’s vertically integrated advertising system. This does not yet look like an immediate hit to revenue, but it adds a discount to the valuation at a time when AI-related spending continues to rise.

GOOGL is still trading within a consolidation range, with demand appearing around the $330 level and selling emerging on rallies toward $360–380. Overall, as noted in Google pulls back as AI spending comes into focus, the outlook remains constructive, but if support is broken, a moderate decline toward $300 should be expected.

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