Alphabet (GOOG) (GOOGL) is an American multinational company serving as the parent company of Google since its reorganization in 2015. Its core business segment, Google Services, includes services such as Search, YouTube, Chrome, and Android, dominating the advertising and mobile landscape. The company is now pivoting to its AI-first strategy with its Gemini 3 model integration into its product suite.
Headquartered in Mountain View, California, Google was founded in 1998.
Alphabet Stock Shines
Alphabet’s stock has delivered exceptional returns to investors with over 75% gain in 52 weeks’ time after joining the exclusive $3 trillion club when it touched its all-time high of $349. Although the stock has seen some correction in recent times due to broader market volatility, it still remains as one of the most attractively valued “Magnificent Seven” stocks.
In contrast to the S&P 500 Telecommunications Index ($SRTS), Alphabet leapfrogged the index, which saw a 30% gain in 2025 compared to Alphabet’s 63% in the same window. While the broader index includes slower-growing telecom giants like Verizon and AT&T, Alphabet's massive 50% weighting within the sector has anchored its recent gains.
Alphabet Posts Record Results
Alphabet posted its fourth-quarter results with a record $113.8 billion in revenue, an 18% increase year-over-year (YoY). The company also exceeded the annual $400 billion revenue mark, citing a massive surge in its cloud and search businesses. The company posted a non-GAAP EPS of $2.82, beating Wall Street estimates by 31%.
Financially, Google Cloud emerged as the standout performer with a 48% revenue surge to $17.7 billion, and it also pushed operating margin to 30.1%. Its core segments performed considerably well, reaching $95.9 billion in revenue, led by a 17% rise in Search and a strong display from YouTube, which surpassed the $60 billion mark in combined annual advertising and subscription revenue.
Alphabet’s AI application Gemini has also crossed the 750 million monthly active users, with its cloud backlog doubling to $240 billion.
Looking forward, Alphabet anticipates an aggressive infrastructure expansion period with CapEx projected at $175 to $185 billion due to increasing AI computing needs. They note the heavy CapEx, along with associated depreciation and infrastructure cost, will squeeze its profit and loss statement, but they remain optimistic on long-term growth, followed by these strategic bets.
Alphabet Upgraded by Analyst
Wells Fargo analyst Ken Gawlrelski has upgraded its price target for Alphabet to $397, reflecting an upside of 44.90% from the market rate while maintaining its “Overweight” rating, citing a major boost in Google Cloud revenue. The analyst laid down two key catalysts for the outlook: first, Google’s lucrative TPU licensing deal with Broadcom (AVGO), and second, its strategic acquisition of Wiz. Analysts estimate a 4% jump in cloud revenue in 2026, followed by another 7% in 2027, giving Google’s operating income a major boost.
Broadcom’s recent disclosure regarding its massive Anthropic order will be a major driver for Google, with Wells Fargo estimating a high-margin $2,500 licensing fee per TPU, totaling $7.5 billion in revenue by 2027. While the Wiz acquisition is expected to boost Google’s cloud platform with its cybersecurity efficiency.
Additionally, Wells Fargo has also raised Google’s EPS estimates for 2027 to $14.42, calling these deals “transitory” expenditures with permanent, high-value profit centers.
Should You Buy Google?
Alphabet stock remains a top-tier AI pick, recently bolstered by Wells Fargo’s price hike on its high-margin TPU deal and Wiz acquisition. This bullish sentiment is well observed across Wall Street with a consensus “Strong Buy” rating with a mean price target of $379.21, reflecting an upside potential of 38% from the current price.
The stock has been rated by 54 analysts with 46 “Strong Buy” ratings, three “Moderate Buy” ratings, and five “Hold” ratings.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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