UBS Raises Alphabet Price Target to $410
UBS analyst Stephen Ju raised the price target on Alphabet (NASDAQ: GOOGL) to $410.00 (from $375.00) while maintaining a Neutral rating.
“A second straight quarter of better-than-expected Search revenues and Cloud backlog growth essentially show that Google has ramped monetization on its GenAI cycle.
Our ad revenue increases by ~1% and ~2% for 2027E and 2028E respectively, whereas our Cloud revenues go up even faster by ~23% and ~7%, respectively.
However with topline growth expectations getting right-sized tonight, we submit that the debate will switch to ongoing cost levels, particularly given Google’s emphasis that 2027 will be yet another investment year.
It may take several quarters for the right level of 2027 CapEx to be added to estimates as Google does not generally give outer year guidance, and that leaves potential for EPS print risks going forward.
Given the near peak multiple where Google trades, we think the risk reward skew remains more favorable with other Internet megacap names. Price target to $410 and maintain our Neutral rating.”
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