Phillip Securities Upgrades Alphabet to Accumulate, $425 PT

Phillip Securities analyst Serena Lim Yi Qi upgraded Alphabet (NASDAQ: GOOGL) from Neutral to Accumulate with a price target of $425 (from $450).

“Robust revenue growth across core business segments due to 1) resilient ad performance (+14% YoY) boosted by Gemini integration in Search and increasing Shorts and CTV monetisation; and 2) fastest cloud growth due to strong demand in Enterprise AI products and services (+82% YoY).

Free cash flow turned negative for the first time due to heavy AI investment, but we believe temporary FCF pressure should support stronger long-term AI growth and revenue visibility.

We upgraded to BUY rating but lowered our DCF target price to US$425 (from US$450).

We reduced our FY26e revenue and PATMI forecasts by ~2% and ~4%, respectively, reflecting moderate margin expansion amid ongoing supply chain constraints.

Despite the near-term earnings revisions, we remain constructive on GOOGL’s long-term outlook.

Its vertically integrated AI ecosystem spanning custom silicon, optimised data centres, and high-performing Gemini models should continue to support robust growth across ad and cloud businesses.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.