Guggenheim Reiterates Buy Rating on Alphabet, $375 Price Target
Guggenheim analyst Michael Morris reiterated a Buy rating and $375.00 price target on Alphabet (NASDAQ: GOOGL).
“We remain positive on BUY-rated Alphabet shares into 1Q26 earnings, as we believe the company’s scale and leadership positions across several high growth businesses will drive sustained outsized revenue and profit growth.
Our above consensus 1Q26 revenue outlook of $107bn implies 19% y/y growth, driven by continued acceleration at Search and Other (+17% y/y), YouTube Ads (+12% y/y), and Cloud (+50% + y/y).
Details on our segment-specific forecasts are within. We believe investors are largely focused on capex outlook and returns as the $175-185bn 2026 guide is a near doubling of 2025’s $91bn record spend.
We see two primary questions for the stock: 1) for how long will the company maintain its significantly elevated capital expenditure pace and 2) will the massive step-up in AI infrastructure investment ultimately yield a more valuable enterprise?
Our view is that investment magnitude and deployment are coming from a position of strength, supported by Cloud backlog that reached $243bn at year end (+161% y/y), Search usage at record levels, double-digit y/y share gains for Google Gemini, and industry-leading YouTube revenue expected in 2026.
Our checks indicate resilient advertiser spend on search amid ongoing AI ad infrastructure buildout, while we expect Olympics, World Cup, and mid-term elections have supported/will support higher CPMs for YouTube in 2026.
While elevated investments will likely weigh on Free Cash Flow in the near-term, we expect the company to surpass prior peak levels by 2028 as AI investments translate to sustained revenue growth across the portfolio.
In this note we also provide details from Guggenheim’s April 12th buyside survey (n=98).
Key takeaways include above-consensus 1Q revenue outlook at Search and Other, YouTube Ads, and Cloud, with further capex growth expected in 2027. Maintain BUY rating and $375 price target.”
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