Regulatory Freeze on Alphabet Assets Amidst European Scrutiny

A French court has issued a provisional order freezing approximately €110 million in assets belonging to Alphabet, the parent company of Google, within France. This legal action is tied to the tech giant's dissolved business operations in Russia and represents the latest in a series of regulatory confrontations the company faces across Europe.

Despite these legal challenges, Alphabet continues to demonstrate significant operational strength, particularly within its cloud computing division and its artificial intelligence initiatives. In the third quarter, Google Cloud revenue surged 34% to $15.16 billion. The division's backlog of committed business soared to $155 billion, marking a quarterly increase of 46%.

The company's AI push is showing substantial user traction. The Gemini app has reached 650 million monthly active users, and the technology now also powers Google Translate. Furthermore, nine of the world's ten largest AI laboratories currently utilize Alphabet's cloud infrastructure services.

Sustained Regulatory Pressure from the EU

The asset freeze is not an isolated incident for Alphabet in Europe. The company had already recorded a $3.5 billion penalty from the European Commission in the third quarter of 2025. Concurrent investigations into Google's search practices and potential breaches of the Digital Markets Act remain ongoing.

Should investors sell immediately? Or is it worth buying Alphabet?

For investors, the evolving regulatory landscape in Europe persists as a source of uncertainty, even if the direct financial impact of the current asset freeze appears limited relative to the company's scale.

Valuation Concerns Surface

Amidst this robust business performance, some market observers are raising questions about the stock's valuation. Trading at a forward price-to-earnings ratio of approximately 30, Alphabet's shares sit above their historical average. The equity's advance of nearly 65% since the start of the year has led several analysts to suggest there may be less room for significant near-term appreciation.

Demonstrating its commitment to future growth, Alphabet has raised its 2025 capital expenditure forecast to a range of $91 to $93 billion. This move signals strong confidence in AI infrastructure investment but also highlights the company's continued substantial capital requirements.

The company is scheduled to report its fourth-quarter results on February 4. A key focus will be whether the underlying operational strength can continue to justify the elevated market valuation.