Al Root
Oh, what a difference a year makes for Google parent Alphabet.
In late 2024, investors worried that Alphabet would be disrupted by OpenAI's ChatGPT and broken up into pieces by U.S. antitrust regulators. Now, Alphabet is " winning everywhere," according to Pivotal Research analyst Jeff Wlodarczak, who raised his price target for Alphabet stock to a Street-high $400, from $350, on Friday, up about 25% from recent levels. He kept his Buy rating on Alphabet stock.
The next highest price target from a large U.S. broker is $380, according to FactSet. A year ago, the top price target on the Street was $240.
Alphabet is now "winning everywhere," wrote Wlodarczak, adding that the company's cash cow, google search, has been resilient, Gemini is improving, and YouTube is the world's largest video streamer.
Then there are AI chips. Alphabet makes its own Tensor Processing Units that work with Nvidia Graphics Processing Units for AI computing.
Alphabet's chips are about costs. Lower costs to complete AI tasks can "accelerate their cloud computing market share and profitability," says Wlodarczak. "Google appears to be the best positioned of its peers to monetize AI investment internally and externally."
(The Street still calls Alphabet Google.)
Alphabet stock was up 0.4% in premarket trading at $318.88, while S&P 500 and Dow Jones Industrial Average futures were up 0.2% and 0.1%, respectively.
It's a bullish call from Pivotal, but not an out-of-consensus one. Overall, 84% of analysts covering Alphabet stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. A year ago, the Buy-rating ratio for Alphabet shares was 80%.
The average analyst price target for Alphabet stock is about $332, up from about $211 a year ago.
Current price targets value Alphabet stock for about 30 times estimated 2026 earnings. A year ago, price targets valued Alphabet stock at about 20 times earnings.
Price-to-earnings multiples reflect investors' expectations for earnings growth and the confidence in the expected earnings growth. For Alphabet, confidence has increased materially. Earnings estimates for 2026 are up only about 10% over the past year. Alphabet stock is up north of 80%.
Now Alphabet just needs to deliver.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
December 05, 2025 08:55 ET (13:55 GMT)
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