Mizuho Raises Alphabet Price Target to $410

Mizuho analyst Lloyd Walmsley raised the price target on Alphabet (NASDAQ: GOOGL) to $410.00 (from $400.00) while maintaining an Outperform rating.

“We came away impressed with the sharp 14ppt acceleration in cloud revenue growth to 48% y/y, (from 34% in 3Q), $82B q/q add to the backlog, with a 13ppt improvement in y/ y Cloud OI margins, and a 1ppt acceleration in ex-FX search revenue.

The capex guide, while shocking, was more than half oriented towards cloud, which carries a more direct and immediate ROI as incremental capacity is monetized quickly.

Here Google has a structural margin advantage given the performance of its proprietary TPUs which we see pulling Cloud margins higher ahead.

We reiterate our Outperform on GOOGL shares and increase our PT to $410 (from $400), +23% upside, with 44% / -28% bull-bear skew.”

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