The analyst fair value estimate for Alphabet shares has shifted modestly, from about US$323.70 to roughly US$330.24, supported by a slightly lower 8.24% discount rate and a higher modelled revenue growth rate of around 13.18%. This update lines up with recent research that focuses on Alphabet’s AI execution across Search, YouTube and Cloud, and how products like Gemini, AI Mode and custom TPUs could feed into future growth and valuation. Stay with this article to see how you can keep on top of these changing assumptions and the evolving narrative around Alphabet.
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🐂 Bullish Takeaways
Many firms highlight Alphabet’s AI execution across Search, YouTube and Cloud, with Needham lifting its price target to US$330 after pointing to a “strong” Q3, including 15% Search growth, 34% Cloud growth and 15% YouTube growth, and arguing that Alphabet’s full stack GenAI go to market is feeding both revenue and margin strength.
Several analysts frame Alphabet as one of the better positioned AI platforms, with Goldman Sachs raising its target to US$288 and Scotiabank moving to US$336 as they point to Gemini adoption, AI monetization and what they describe as strong execution across the business.
Cloud is a recurring positive, with Piper Sandler lifting its target to US$330 on the back of Alphabet’s Q3 results, including a Cloud backlog that reached US$155b, and Loop Capital upgrading the stock while arguing that the opportunity for Alphabet’s proprietary AI processors is becoming better appreciated.
Newer coverage is also constructive, with HSBC starting Alphabet with a Buy rating and a US$285 target while emphasizing Gemini, custom chips and core Search and Cloud as key assets, and BNP Paribas Exane initiating with an Outperform rating and a US$355 target.
Some analysts still flag constraints, often around how much upside is already reflected in the share price and the timing of AI features. Wells Fargo, for example, is keeping an Equal Weight rating while raising its target to US$236 and pointing out that sentiment has turned more positive but that disruption from AI Mode changes to default search is more of a 2026 story.
🐻 Bearish Takeaways
There are fewer outright bearish voices in the recent research, but some firms are cautious on ancillary projects. Wells Fargo, for example, questions the economics of Waymo food delivery and sees a challenging path to scale at current cost levels.
A subset of analysts focus on risk rather than upside, with Wells Fargo highlighting that Google is not entirely “in the clear” despite better ad trends and that changes like deeper AI integration into Search could still present future uncertainty.
Some commentary around AI driven products, like travel tools and agentic booking in AI Mode, has triggered concern among investors about disruption risk for partners, even though firms like KeyBanc and BTIG argue that markets may be overestimating those risks. This leaves open questions around how these shifts might be received over time.
Do your thoughts align with the Bull or Bear Analysts? Perhaps you think there’s more to the story. Head to the Simply Wall St Community to discover more perspectives or begin writing your own Narrative!
NasdaqGS:GOOGL 1-Year Stock Price Chart
Google is planning a large scale global AI infrastructure buildout, including a US$40b commitment to three Texas data centers through 2027, more than US$15b for a data center hub in India’s Andhra Pradesh with a planned 1 gigawatt hyperscale campus in Visakhapatnam, an AI data center on Australia’s Christmas Island tied to a defense cloud deal, and its largest German investment so far focused on data centers and renewable energy projects.
Alphabet is pushing deeper into AI chips and models, with reports of a seventh generation Ironwood TPU that is more than 4x faster than the prior version, pitches to place these TPUs inside Meta and large banks’ data centers, and an open sourced Coral NPU IP initiative with VeriSilicon aimed at ultra low energy edge LLM applications.
Google is broadening AI partnerships, including talks around a high tens of billions cloud deal and deeper investment with Anthropic, a reported AI model agreement with Apple to power a revamped Siri using a 1.2 trillion parameter Gemini model at roughly US$1b a year, and an expanded role as cloud and AI provider for the LA28 Olympic and Paralympic Games and NBCUniversal coverage.
Regulatory and legal items remain active, with Google ordered to pay €573m in two German antitrust damages cases tied to comparison shopping, an EU probe being prepared into news publisher rankings under the Digital Markets Act, a class action lawsuit over alleged defects in Nest smart home devices, continued scrutiny of the Play Store following the Epic Games antitrust settlement proposal, and a U.S. Supreme Court decision that left parts of an injunction in place. At the same time, Alphabet is pairing its AI and data center expansion with emissions related commitments such as Amazon rainforest restoration via Mombak, a partnership with NextEra to restart Iowa’s Duane Arnold nuclear plant to power AI and cloud operations, and a CO2 removal purchase agreement with Ebb for 3,500 tons using ocean based carbon removal technology.
Fair Value: The analyst fair value estimate has shifted from about US$323.70 to roughly US$330.24 per share.
Discount Rate: The applied discount rate is now about 8.24%, compared with 8.26% previously. This reflects a small adjustment in the risk assumption used in the model.
Revenue Growth: The modelled revenue growth rate is now roughly 13.18%, up from about 12.77%.
Net Profit Margin: The assumed net profit margin remains broadly similar, moving from about 30.12% to around 30.10%.
Future P/E: The future P/E assumption has shifted slightly higher, from about 28.88x to roughly 29.14x.
Narratives on Simply Wall St let you connect the story you see for a company with the numbers behind it. You set out how you think Alphabet will grow, link that view to forecasts for revenue, earnings and margins, then tie it all to a fair value. Narratives live on the Community page, update as fresh news or earnings land, and help you compare Fair Value to the current price so you can decide if Alphabet still fits your view.
Head over to the Simply Wall St Community and follow the Narrative on Alphabet to stay on top of how the story is evolving:
How accelerating AI adoption across Search, YouTube and Google Cloud could affect user engagement, monetization and long term revenue growth in the current fair value model.
What heavy AI infrastructure and data center spending, capital commitments and custom TPU investment might mean for future margins and earnings power.
How rising regulatory pressure, legal outcomes, competition and unprofitable Other Bets are factored into the risks and valuation assumptions for Alphabet.
Read the full Alphabet Narrative on Simply Wall St to see how these pieces come together in one coherent view.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include GOOGL.
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