UBS Raises Alphabet Price Target to $348
UBS analyst Stephen Ju raised the price target on Alphabet (NASDAQ: GOOGL) to $348.00 (from $345.00) while maintaining a Neutral rating.
“We learn today that ROIC on Google’s GenAI CapEx is compounding faster with Gemini enabling better user results, more monetizeable queries and better ad ROAS for Search and higher customer demand for Cloud.
This means that our ad revenue dollars increase by ~$5B and ~$6B for 2026E and 2027E respectively (increase 2%), whereas our Cloud revenue dollars go up even faster by ~$19B and ~$23B respectively (24% and 22%).
That said as Google’s CapEx guide was $55B ahead of our projection for 2026, total costs increase ~$16B and ~$24B to result in a more muted impact to EPS (2027E EPS rises by 1%), which may disappoint investors as GOOGL shares are near peak multiple levels.
We maintain our Neutral rating on balanced risk reward, particularly as the Street begins to discount ChatGPT’s approaching ramp in ad monetization.”
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