Freedom Broker Downgrades Alphabet to Hold, $400 Price Target

Freedom Broker analyst Saken Ismailov downgraded Alphabet (NASDAQ: GOOGL) from Buy to Hold with a price target of $400.00 (from $365.00).

“Alphabet (GOOGL) reported stronger-than-expected results, primarily driven by significant revenue growth and margin expansion in Google Cloud, alongside record Google Search metrics fueled by the rollout of AI Overviews and AI Mode, enhanced AI-driven monetization, and successful positioning against ChatGPT.

Demand for the cloud segment is accelerating so rapidly that its backlog nearly doubled in Q1 2026, partly driven by demand for the company’s custom TPU chips.

Furthermore, the development and deployment of proprietary TPUs significantly reduced the cost of serving Gemini queries, heavily supporting the company’s operating margin despite growing CAPEX.

Under these circumstances, management’s upward revision of its 2026 CAPEX guidance does not raise major concerns, as the increase is moderate and justified by clear monetization channels, primarily through Google Cloud and Google Search.

We view Alphabet’s results positively but are downgrading our rating from Buy to Hold following the stock’s strong post-earnings rally.

We are raising our Price Target (PT) from $365 to $400, implying a 28x P/E multiple on FY2027E earnings.”

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