Shares of Google parent company Alphabet Inc (NASDAQ:GOOG) fell more than 2% to about $325 on Thursday following the company’s fourth quarter earnings report, but analysts are maintaining a bullish stance, highlighting the company’s accelerating AI and cloud adoption as key drivers for future growth.
Bank of America reiterated a ‘Buy’ rating with a $370 price target, noting that the quarter “strengthens the thesis that Google search activity will accelerate from new AI use cases” and that AI is “structurally driving higher Search monetization.”
The firm highlighted that Alphabet’s Gemini AI platform is supporting both search and cloud expansion, with its 750 million monthly active users (MAUs) poised for further monetization through advertising.
BofA also noted that cloud growth, bolstered by Gemini and TPU capabilities, could see additional upside as Alphabet invests heavily in capacity.
“We continue to see opportunity for better monetization of zero-click searches that are being converted to AI Overviews as a key upside driver from here,” the bank’s analysts wrote.
Wedbush echoed this bullish sentiment in its ‘Outperform’ rating with a $370 price target, focusing on the company’s execution in AI and cloud infrastructure. The analysts believe that the quarter “further validates Alphabet’s position as a leading AI beneficiary, with management observing tangible results across cloud and advertising.”
They pointed to robust adoption of Gemini Enterprise, with over 8 million paid seats sold within four months, and highlighted that roughly 75% of cloud customers are using vertically optimized AI solutions.
Wedbush described Alphabet’s elevated capital expenditure plan as constructive, supporting ongoing growth across AI infrastructure and core cloud products.
Jefferies maintained a ‘Buy’ rating with a $400 price target, emphasizing the company’s cloud and AI acceleration.
The firm noted that fourth quarter cloud revenue growth of 48% year-over-year was the fastest since Q2 2021, while search growth hit 17%, the highest since Q1 2022.
The analysts described the doubling of fiscal year 2026 capex versus fiscal year 2025 as a reflection of confidence in Alphabet’s AI and cloud portfolio. “GOOGL’s high profitability, generous cash flows, and strong balance sheet should more than cover capex needs,” they wrote.
Jefferies also highlighted Gemini’s rapid adoption, including 750 million MAUs on the consumer app and 8 million paid enterprise seats, calling the metrics “impressive” and indicative of a durable AI-driven growth trajectory.
Across the three firms, a common theme is the transformative role of AI and cloud in Alphabet’s business. Analysts pointed to monetization opportunities in search, the expanding footprint of Gemini apps, and the strategic deployment of capital as reasons for optimism.
