This article first appeared on GuruFocus.
Alphabet (NASDAQ:GOOG) may be getting a quiet lift in its cloud business, with Wells Fargo pointing to a couple of behind-the-scenes drivers that could meaningfully boost growth over the next 2 years.
At the center of it is TPU licensing. The bank estimates Google Cloud revenue could see an extra 4% bump in 2026 and 7% in 2027, with operating income rising 6% and 14%. A big reason is demand tied to Anthropic. Broadcom (NASDAQ:AVGO) recently flagged $21 billion in TPU-related orders, and Wells Fargo believes Google benefits through high-margin licensing fees. That could translate into about $2.5 billion in added revenue in 2026 and $7.5 billion in 2027, with margins around 85%, which is where this really starts to matter.
Then there’s Wiz. The cybersecurity deal is expected to add around 2% to cloud growth in 2026, with a larger contribution as things scale into 2027. Put together, it paints a picture of growth that isn’t just coming from selling cloud services, but from monetizing the ecosystem around it.
