Wells Fargo Reiterates Overweight Rating on Alphabet, $435 Price Target

Wells Fargo analyst Ken Gawrelski reiterated an Overweight rating and $435.00 price target on Alphabet (NASDAQ: GOOGL).

“Do not see equity raise as necessary to address any near-term financing needs. Estimate cash flow from ops and balance sheet plenty capable of sustaining investment.

Surprised by equity offering post credit market issuances raising more than $50B YTD & 1Q:26 balance sheet nearly $50B of net cash.

Further, gross leverage (gross debt/EBITDA) at end of 1Q a very manageable 0.4x. Size of equity offering suggests to us a balanced approach to financing current plans, not pursuit of new opportunities.

Possible that Google signaling its intent, both to markets and to competitors & suppliers, to invest heavily to extend its compute capacity advantage.

To meet surging Google Cloud customer demand, as evidenced by backlog growth to $462B (est. $366B ex-TPU sales) in 1Q:26 from $108B in 2Q:25, project Google would need to shift nearly 60% of its compute capacity to Google Cloud and away from internal uses.

Projections for market-leading 9.3GW of compute additions in ’27 could prove conservative. Estimate FCF approaches breakeven in 2027 on $290B of CapEx, $45B above Street estimates.

Press reports also suggest Google working with Blackstone to create off balance sheet vehicle to offer TPU-based capacity to customers.

Expect Google to continue to explore multiple financing means, on and off balance sheet, to exploit its TPU capacity advantage.

Note Google has historically managed to a very conservative balance sheet with greater than $100B net cash 2018-2023.”

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