Wells Fargo Upgrades Alphabet to Overweight, $387 Price Target

Wells Fargo analyst Ken Gawrelski upgraded Alphabet (NASDAQ: GOOGL) from Equal Weight to Overweight with a price target of $387.00 (from $354.00).

“Project Google expands compute capacity to 35GW by 2028 from 15GW at YE25, extending its capacity lead relative to the hyperscaler peer group.

Increasingly appears hyperscaler ambitions are bounded by compute capacity.

As this market construct persists medium term, see Google gaining competitive advantage as it widens capacity leadership vs. peers.

See capacity as enabling Google to fulfill its ambitions in GCP and search/agentic/autonomous businesses.

Raise our already well-above consensus Google Cloud (GCP) estimates to map to our capacity build. ’26 GCP revenue to +60% y/y, 11% above consensus, and 2027/2028 to 42%/28% y/y growth, 16%/12% above consensus.

Refine forecasts to map to our GCP capacity build as the persistent supply/demand imbalance in the industry suggests supply dictates revenue opportunity.

Estimate GCP expands capacity to 16.9GW in 2028 from 7.6GW in 2025. Cloud OI FY26/FY27 estimates now 10-15% ahead of Street.

See multiple new opportunities to capitalize on Google’s leadership in compute capacity, distribution and consumer data.

Incorporate into projections a Gemini consumer subscription revenue business that we project will exit 2027 at $12B ARR from $4B exiting 2025.

We also see upside options in the Apple Siri relationship, most likely a 2027+ contributor, and potentially even TPU sales, though we believe the latter will remain limited in the next few years as compute capacity is highly strategic.”

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