Evercore ISI Raises Alphabet Price Target to $420

Evercore ISI analyst Mark Mahaney raised the price target on Alphabet (NASDAQ: GOOGL) to $420.00 (from $400.00) while maintaining an Outperform rating.

“Reiterate Outperform: GOOGL is not a Classic DHQ (Dislocated High Quality) stock, but the fundamentals here are very, very impressive.

GOOGL is a Very High Quality Compounder, with plausibly the best AI Narrative on the planet – from the chip layer to the infrastructure layer to the application layer.

One of the best Vertically Integrated AI Assets in the market. And valuation (~27X ’27 P/E) remains reasonable, even with the dramatic surge in shares in the last 12 months.

What Google has proven with the past 3-4 prints is that AI is benefitting its core advertising segments — a key debate several months ago.

With Search, the deployment of AI is causing material new growth in overall query volume, including commercial query volume, and Google is also using AI to better drive highconverting leads to marketers.

Pricing is rising, but Search ROI is holding strong for marketers (a conclusion consistent with our Q1 channel checks), and mgmt. explicitly flagged upside to the historic ~20% query-coverage rate as Gemini better understands intent on long-tail queries.

Google Cloud’s results clearly demonstrate market share gains based on a differentiated full-stack offering — Q1 revenue grew +63% Y/Y with backlog nearly doubling sequentially to $462B and revenue from products built on Google’s AI models growing ~800% Y/Y.

And Google still has some significant growth drivers, including Subscriptions (now 350MM paid, up from 325MM just one quarter ago), Gemini app, Gemini Personal Intelligence (our favorite), TPU merchant silicon sales, and Waymo.

Reit Outperform.”

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