Investing.com — Bank of America said Alphabet’s momentum entering 2026 reflects a shift in AI sentiment and a strengthening competitive position, arguing that several catalysts could help push the company’s valuation higher, potentially making it the world’s most valuable firm.
Analyst Justin Post reiterated a Buy rating and a $370 price target on Google shares, writing that the “AI cycle [is] moving in the right direction for Alphabet.”
The firm highlighted Alphabet’s standout performance in 2025, noting the stock was “up 65% y/y,” far outpacing the NASDAQ and FANG peers.
While some of those gains were driven by earnings upgrades, BofA stated that “the majority of Alphabet’s 2025 stock returns were driven by multiple expansion” tied to AI optimism and a favourable ruling in the Search remedy case.
For 2026, BofA pointed to five potential positives that could support further upside. These include “greater Street appreciation of Alphabet’s differentiated AI asset base,” stronger monetisation from “shift to AI query results,” “Cloud growth upside supported by Gemini and TPU differentiation,” new opportunities in the “Agentic AI ecosystem,” and “increasing commercial viability of TPU and Other Bets.”
Post commented that Alphabet remains well-positioned across key AI layers, citing leadership in “LLM (Gemini), infrastructure (TPUs), consumer reach (search), and enterprise adoption (Cloud, Workspace).”
However, BofA also flagged risks including rising search competition, high-profile AI product launches from rivals, increasing costs, and valuation pressure.
Even so, the bank maintained that Alphabet is “a top play for AI exposure,” supported by a “balanced risk/reward framework.”
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