Alphabet (GOOGL +0.67%) (GOOG +0.68%) is ready to close out 2025 with a bang. The dominant internet business has seen its shares skyrocket 62% so far this year (as of Dec. 16), thanks to robust financial results and a leading position in the artificial intelligence (AI) race.
This top tech stock has historically been a great investment. And I predict that it will soar over the next five years. Here's one reason why.
Image source: Alphabet.
Higher earnings can propel shares through the rest of the decade
Benjamin Graham famously suggested that over the long term, the market is a weighing machine, as fundamentals run the show. Along the same vein, Alphabet shares will be lifted by much higher profits in 2030.
In the past five years, the company's net income climbed at a compound annual rate of 26%. Wall Street consensus estimates call for earnings per share to rise at a yearly clip of 17% between 2024 and 2027. I expect double-digit gains to continue past that forecast period.
Therefore, it wouldn't be surprising at all to see Alphabet's stock price double by the end of the decade.
NASDAQ: GOOGL
Key Data Points
Digital ad growth will be a key factor
Alphabet's bread and butter continues to be its digital ad efforts, representing almost 75% of its revenue base. With the business leveraging AI tools not only to improve customers' ad targeting capabilities, but to bolster its various user-facing products and services, Alphabet is in a favorable position.
