Alphabet Bull Case (GOOGL) could change following EU AI rules and Gemini delay – learn why

• In recent days, Alphabet has delayed the launch of its flagship AI model Gemini 3.5 Pro in the face of a European Commission order requiring Google to release key Android features and anonymized search data to rival AI developers under the Digital Markets Act from 2027.
• These two pressures, setbacks in the execution of core AI products, and stricter EU interoperability rules, are raising new questions about Alphabet’s competitive moat in the high-value cloud, search, and mobile ecosystems.
• Here, we examine how the Gemini 3.5 Pro delay reshapes Alphabet’s existing investment story and risk balance amid increasing EU regulatory demands.

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Alphabet Investment Story Summary

To own Alphabet today, you need to believe that its heavy spending on AI and cloud will lead to sustained demand across search, YouTube, and Google Cloud, even as short-term sentiment fluctuates with each Gemini headline. While the Gemini 3.5 Pro delay and the EU’s new interoperability rules are setbacks for the AI ​​story, the main near-term catalysts remain the same. This is evidence that the use of AI is turning into high-margin cloud and advertising revenue, with major risks of regulation and increased capital intensity to profitability.

In that context, Berkshire Hathaway’s multibillion-dollar private placement into Alphabet is particularly relevant for funding AI data centers and infrastructure. This underscores how cloud and AI capabilities are becoming central themes at the same time as Europe forces Alphabet to open up parts of Android and search to rivals. For me, this combination places more emphasis on upcoming cloud outcomes and AI monetization updates as the clearest reality check for the story.

But behind Alphabet’s recent strong earnings are increasing regulatory and AI competition risks that investors should be aware of, among other things.

Read the full story on Alphabet (it’s free!)

The Alphabet story projects revenue of $701.1 billion and revenue of $221.8 billion by 2029. This would require an 18.4% annual revenue increase, or an increase in revenue of approximately $61.6 billion from the current $160.2 billion.

We reveal how Alphabet’s projections yield a fair value of $427.89, 23% higher than the current price.

explore other perspectives

Before the news, some of the most optimistic analysts had predicted 2029 sales of around US$832 million and revenue of around US$263.7 billion, while warning that rapid advances by AI-native rivals could erode Google’s search dominance. This shows how big the disagreement is and why it is worth weighing multiple perspectives in light of Gemini’s delays and tightening of EU rules.

Check out 92 other fair value estimates on Alphabet – find out why the stock is worth 42% more than its current price.

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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