Morgan Stanley Lowers Alphabet Price Target to $375

Morgan Stanley analyst Brian Nowak lowered the price target on Alphabet (NASDAQ: GOOGL) to $375 (from $400) while maintaining an Overweight rating.

“GOOGL is not an expensive stock (16X our ’28 EPS in the after hours…and maybe cheaper depending on the size of third party TPU sales).

But, in our view, GOOGL’s multiple will be driven by search innovation, scaling next generation agentic offerings and showing an ability to drive durable incremental revenue growth through this transition.

This is because (in our view) third party TPU sales are lower multiple earnings.

GOOGL shipped its latest Gemini agents to enterprises on October 8th and later this year intends to bring that same Gemini agentic experience to consumers, starting with the 1 billion users in the Gemini app.Big picture, re rating GOOGL into ’27 will likely be predicated on successfully shipping products like this to material corpuses of users and driving faster revenue growth from them…as we have seen with META.

Consider that the gap between GOOGL search growth and META advertising growth reached a new recent peak of ~13%…even as META’s 3Q:25 ad base was the same size as search at ~$63bn.

This comparison, search disruption question marks (along with the material incremental opportunities not included in META forward numbers or priced including Muse, API, business agents, etc.) is likely to keep the bar high for GOOGL to clear.

Not to say that they can’t clear it (and should given their leading tech, data and distribution) but they need to in order to regain incremental investor confidence.”

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