Alphabet (GOOGL) Stock: Price Target Jumps as Analyst Says Company “Winning Everywhere”

TLDR

• Pivotal Research raised Alphabet’s price target to $400, a Street-high representing 25% upside from current levels
• Analyst Jeff Wlodarczak says Alphabet is “winning everywhere” with strong performance in search, AI assistant Gemini, and YouTube streaming
• Alphabet’s custom Tensor Processing Units offer cheaper AI computing than Nvidia GPUs, potentially boosting cloud market share
• Analyst sentiment has improved dramatically, with 84% of analysts now rating the stock a Buy versus 80% a year ago
• The stock trades at about 30 times estimated 2026 earnings, up from 20 times a year ago, reflecting increased investor confidence

Pivotal Research analyst Jeff Wlodarczak lifted his price target for Alphabet stock to $400 from $350 on Friday. The new target represents roughly 25% upside from recent trading levels. He maintained his Buy rating on the stock.

Alphabet Inc., GOOGL

The new target stands as the highest on Wall Street. The next closest price target from a major U.S. broker sits at $380, according to FactSet data. A year ago, the top Street target was just $240.

The analyst painted a picture of a company firing on all cylinders. Google search remains resilient as a cash generator. The Gemini AI assistant continues to improve. YouTube holds its position as the world’s largest video streaming platform.

What a difference twelve months makes. In late 2024, investors fretted about OpenAI’s ChatGPT disrupting Alphabet’s core business. Antitrust concerns also loomed large. Those worries have faded considerably.

Tensor Processing Units Could Drive Cloud Growth

Alphabet develops its own Tensor Processing Units that work alongside Nvidia Graphics Processing Units for AI computing tasks. These custom chips focus on reducing costs.

Lower expenses for AI workloads could “accelerate their cloud computing market share and profitability,” Wlodarczak wrote. He believes Alphabet appears best positioned among peers to monetize AI investments both internally and externally.

The chip strategy offers two potential benefits. TPUs might capture market share from Nvidia. Or they could pressure GPU prices lower. Either outcome helps Alphabet’s bottom line.

Analyst Michael Levine from the same firm echoed similar themes. He said Gemini ranks among the strongest AI systems available today. Years of development and vast data resources back the platform. Few competitors can match that foundation.

More searches now route through Gemini on mobile devices. This shift allows Alphabet to keep more profit in-house. Apple even pays for Gemini access, a deal that improves margins and frees up capital for reinvestment.

Distribution Advantage Creates Long-Term Moat

Gemini reaches more than five billion users across Alphabet’s product ecosystem. Levine sees this built-in distribution as an insurmountable lead. Most users stick with default applications on their devices.

This behavior pattern could cement Gemini as the go-to AI tool for phones and smart glasses. The analyst expects Gemini to gain even more ground in 2026.

Levine warned that OpenAI might face headwinds. Rising costs and slowing growth could force spending cuts next year. That might create turbulence for AI-focused stocks. But he thinks Alphabet can weather any storm.

Wall Street’s view of Alphabet has shifted dramatically. Currently, 84% of analysts covering the stock rate it a Buy. That’s up from 80% a year ago. The average Buy-rating ratio for S&P 500 stocks hovers around 55%.

The average analyst price target now sits at $332, jumping from $211 twelve months ago. Current targets value Alphabet at roughly 30 times estimated 2026 earnings. Last year, targets implied a multiple of just 20 times earnings.

Price-to-earnings ratios reflect both growth expectations and confidence in those projections. For Alphabet, confidence has grown substantially. Earnings estimates for 2026 have risen only about 10% over the past year. Yet the stock has climbed more than 80%.

Alphabet stock gained 0.4% in premarket trading to $318.88. The consensus rating on Wall Street stands at Strong Buy based on 29 Buy recommendations and seven Hold ratings.

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