Why Alphabet (GOOGL) is a Top Stock for the Long-Term

Zacks' Focus List, a portfolio of 50 stocks selected based on earnings estimate revisions and the proprietary Zacks Rank, has historically outperformed the S&P 500, with a cumulative return of 2,519.23% versus 854.95% from February 1996 to March 2021. Alphabet (GOOGL), a current #3 (Hold) stock, was added to this list on May 19, 2025, at $166.19 and has since risen 5.81% to $175.84, supported by recent upward earnings estimate revisions by analysts, a 14.6% average earnings surprise, and an anticipated 18.5% earnings growth for the current fiscal year.

Analysis

According to a Zacks report, Alphabet (GOOGL) has been added to its 'Focus List,' a portfolio of 50 stocks selected for long-term outperformance. The basis for this inclusion is the company's strong fundamentals and positive earnings outlook, despite its current Zacks Rank of #3 (Hold). GOOGL was added to the list at $166.19 and has since appreciated 5.81% to $175.84. The bullish long-term case is supported by several metrics: an expected earnings growth of 18.5% for the current fiscal year, a historical average earnings surprise of 14.6%, and its dominant market position with over 94% of online search volume. Furthermore, the fiscal 2025 Zacks Consensus Estimate has increased by $0.04 to $9.53 following upward revisions from two analysts in the last 60 days. The report's methodology emphasizes selecting stocks with rising earnings estimates, suggesting that while GOOGL is a 'Hold' based on short-term valuation or momentum factors, its underlying earnings trajectory is viewed as a key driver for future price appreciation.

Key Decisions for Investors

• Given the positive long-term indicators such as 18.5% expected earnings growth and upward analyst revisions, investors with a long-term horizon should consider the fundamental strength of GOOGL, which underpins its inclusion on the historically outperforming Focus List.
• Investors should note the discrepancy between the stock's #3 (Hold) rating and its placement on a long-term buy-oriented list, which may imply that while near-term upside could be limited, the long-term growth story remains intact.
• The core thesis is driven by earnings estimate revisions, so it is critical to monitor future earnings reports and analyst consensus changes to validate the projected growth and a continuation of its 14.6% average earnings surprise.