By Nate Wolf
Alphabet's earnings report last Thursday couldn't have gone much better, so it should be no surprise that analysts are growing more confident in the Google parent.
More than 40 analysts polled by FactSet lifted their price targets for Alphabet stock following the report. Of the 74 firms tracked in total, 86% rate the shares a Buy.
J.P. Morgan joined that chorus over the weekend, reiterating an Overweight rating on Alphabet stock after reading the full quarterly filing. The firm had already bumped its price target to $460 from $395 immediately after the report last week.
Shares were down 0.9% to $382.41 on Monday. The stock has climbed 23% this year and 135% over the last 12 months, bringing it within striking distance of overtaking Nvidia as the world's most valuable company.
"Google delivered a standout quarter, with its full-stack [artificial-intelligence] approach driving accelerating growth," wrote J.P. Morgan analyst Doug Anmuth. "GOOG/L remains our top overall pick, and we believe shares will continue to go higher on both earnings revisions & multiple expansion."
Google nearly doubled its revenue backlog to $468 billion in the first quarter from $243 billion the prior quarter, a feat Anmuth called "the single-most impressive metric this earnings season thus far." Cloud business is 99% of that backlog, and more than half of it is expected to become revenue within the next two years.
The company's core search business is also picking up steam. Revenue from the segment grew to 19% year over year in the first quarter, marking the fourth consecutive quarter of accelerating growth. That data, J.P. Morgan argued, supports Google's argument that AI is helping -- not hurting -- search.
On the revenue side, investors' questions about Google will now center on the sustainability of search growth and how quickly the company can turn the cloud backlog into revenue. As for costs and margins, Google will need higher capital expenditures to satisfy its cloud backlog, J.P. Morgan said, likely meaning another sizable jump in capex in 2027.
The firm will also be watching Google's sale of AI tensor processing units, or TPUs, to these cloud customers.
The TPU work has been a success, with hardware sales driving a big share of that cloud backlog, D.A. Davidson Gil Luria wrote in a research note last week. The costs and mechanics of these TPU deals remain a question, however.
Following the strong earnings print, D.A. Davidson was one of the few dissenters on Wall Street, reiterating a Neutral rating on Alphabet shares. Luria boosted his price target to $375 from $310, but said Google's outperformance is "well reflected in the current valuation."
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 04, 2026 11:19 ET (15:19 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments