BofA Securities Reiterates Buy on Alphabet, $430 PT

BofA Securities analyst Justin Post reiterated a Buy rating and $430 price target on Alphabet (NASDAQ: GOOGL).

“Reports 7/22. Checks suggest strong retail search growth, with some softness in CPG & travel, and are modestly lowering our search ests for FX, but remain slightly above Street at 17% growth.

We are raising our Cloud growth est. to 70% given strong demand indicators and backlog that suggests at least $230bn in revs. over next 8 quarters, and we think 70% is close to Street expectations.

We expect 2Q rev/EPS of $102.1bn/$8.38 vs Street $101.0bn/$2.90.

We estimate an $80bn benefit to 2Q OI from Anthropic stake revaluation (Anthropic’s valuation increased from $380bn in 1Q to $965bn in 2Q).

We raise ests. for higher Cloud revenues and Anthropic asset appreciation, offset by US$ depreciation in 2Q and a higher share count (recent capital raise).

For 2026, we raise net revenue by 1% to $427bn and EPS by 36% to $19.70. We now expect 16% full year search growth and 72% Cloud growth.

For 2027, we raise net revenue by 3% to $537bn & EPS by 1% to $14.70.

Our estimates assume $290bn of Cloud revenues from 2Q’26- 1Q’28, above backlog at $230bn as recent revs. have come in higher than commitments.

Given focus on capex ROI, we think 2Q Search growth and usage commentary, 2Q cloud growth/margins, and any new capex commentary key for stock.

For 3Q, we expect Rev/EPS of $108.8bn/$3.03, vs Street at $107.9bn/$3.02.

Given accelerating AI demand, higher component pricing (memory, etc.), and recent capital raise we think Google could increase CY26 capex range by ~5% to $190-$200bn (BofA at $196bn).”

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