Alphabet (GOOGL) Stock: Jefferies Raises Price Target to $365 on Google Cloud Growth

TLDR

• Jefferies raised Alphabet’s price target from $320 to $365 while maintaining a Buy rating
• The firm cited Google’s “unrivaled data moat” and seven products with over 2 billion monthly active users each
• Google Cloud projected to maintain growth above 30% through 2026
• Net revenue growth expected to slow slightly to 13% in 2026 from 15% in recent years
• Operating margin forecast to expand 140 basis points to roughly 39%

Jefferies lifted its price target on Alphabet stock to $365 from $320, keeping its Buy rating intact. The new target sits well above the current trading price of $315.15.

Alphabet Inc., GOOGL

The firm pointed to Google’s massive data advantage as a core reason for the upgrade. With seven products each boasting over 2 billion monthly active users, Alphabet has the scale to deploy generative AI across its entire ecosystem.

Jefferies sees Gemini maintaining leadership in the AI race. The company’s infrastructure and user base put it in a strong position as the AI competition heats up.

Revenue growth is expected to tick down slightly. After two years of 15% growth, Jefferies forecasts net revenue growth of 13% in 2026. That’s still healthy growth for a company of Alphabet’s size.

Operating Margins Set to Expand

Operating margins are set to improve. The firm projects margins will expand by 140 basis points to around 39%. That kind of margin expansion shows operating leverage kicking in.

Alphabet reported $385.48 billion in revenue over the last twelve months. The actual growth rate came in at 13.42%, right in line with projections.

Google Cloud Growth Remains Strong

Google Cloud remains a bright spot. Jefferies expects Cloud growth above 30% to continue through 2026. The firm models specific growth rates of 31%, 32%, and 30% for 2024, 2025, and 2026 respectively.

Google Cloud Platform is outpacing overall Cloud performance. That suggests the infrastructure business is gaining traction against competitors. The Cloud segment contributed to Alphabet’s strong EBITDA of $145.17 billion.

The stock trades at premium multiples. Alphabet’s current valuation of 17.6x 2026 EV/EBITDA sits near 15-year highs. The P/E ratio stands at 31.06, roughly double the Interactive Media and Services industry average of 15.5x.

Jefferies thinks there’s room to run. Despite the elevated multiples, the firm believes rising estimates could push the stock higher. There’s potential for multiple expansion toward pre-financial crisis levels.

A discounted cash flow model suggests the stock trades roughly in line with its intrinsic value at $315.45 per share. That’s essentially flat with the current price.

Citizens recently raised its price target to $385, pointing to search revenue acceleration expected in Q4 2025. Medium-term catalysts include Gemini, Cloud, Waymo, and custom TPU chips.

Alphabet recently announced a $4.75 billion acquisition of Intersect. The deal targets data center and energy infrastructure to support Google’s power needs.

The stock has delivered strong returns. Shares are up 65% over the past year and 263.6% over three years.

Alphabet generated roughly $92.6 billion in free cash flow over the last twelve months. Analysts project this could reach $189 billion by 2030.

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