Barclays Lowers Alphabet Price Target to $405

Barclays analyst Ross Sandler lowered the price target on Alphabet (NASDAQ: GOOGL) to $405 (from $425) while maintaining an Overweight rating.

“Alphabet revenue and OI both missed consensus but the tone of the call was upbeat. Cloud was once again the standout performer, growing 103% y/y, reflecting the first small wave of TPU-aaS revenue.

The comment about “prioritizing user experience first” (followed by monetization later) admittedly gave us a bit of PTSD and harkens back to the airpocket experienced pre-pandemic.

It’s becoming clear that blue-link queries aren’t growing nearly as fast as total queries, and we worry that more aggressive agentic product flows in Search in ’27 may exacerbate this trend.

Investors should remember in these moments that airpockets with record engagement (under-monetized queries) are manageable situations that GOOGL has worked through before, and much easier to navigate than if query growth were under pressure.

Fair to say this is an investor “code yellow”, but not some kind of AI roadkill situation (and somewhat expected by us; Unpacking The AI Transition In Search, 4 June 2026(open in new tab)).

Given the breadth of Alphabet’s business, these setbacks in certain areas often happen when exciting trends appear elsewhere (Gemini Carbon, TPU-aaS, Waymo, etc.).

At 14x ’28 EPS with slowing ads growth in ’27, shares are still attractive, but may stay under pressure for a bit.”

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