Alphabet stock price target raised to $205 from $185 at Morgan Stanley

Investing.com - Morgan Stanley (NYSE:MS) has raised its price target on Alphabet (NASDAQ:GOOGL) to $205.00 from $185.00, while maintaining an Overweight rating on the stock. The tech giant, currently valued at $2.25 trillion, shows strong financial health according to InvestingPro data, with 12 analysts recently revising earnings estimates upward.

The investment firm cited its bullish view on Alphabet’s accelerating pace of innovation, productization, and improving disclosure as key factors behind the decision.

Morgan Stanley indicated it does not expect the ongoing search debate to be fully resolved in the second half of 2025, and is focusing on profitable search growth and potential earnings per share revisions.

The firm is specifically watching whether Alphabet can make the market confident in a path to over $10 of earnings per share in 2026, along with increased disclosure on incremental GenAI-enabled engagement and monetization.

Morgan Stanley also noted that post-earnings developments by the end of August, including potentially benign Department of Justice remedies that could open the door for a Gemini/Apple partnership, will be important for market confidence in Alphabet’s long-term positioning.

In other recent news, Alphabet Inc. has received preliminary court approval for the settlement of a shareholder derivative lawsuit, as reported in a recent SEC filing. The settlement involves claims brought by shareholders on behalf of the company, with the defendants, including current and former officers and directors, denying any liability. Meanwhile, BofA Securities has raised its price target for Alphabet to $210, citing stable growth in search spending and projecting second-quarter revenue of $81 billion, which surpasses Street estimates. KeyBanc Capital Markets also increased its price target to $215, driven by anticipated strong results in Search, YouTube, and Cloud services, as well as the company’s focus on artificial intelligence.

Waymo, Alphabet’s self-driving division, is expanding its service area in Austin, Texas, from 37 to 90 square miles, aiming to strengthen its position against competitors like Tesla (NASDAQ:TSLA). This expansion is part of Waymo’s broader strategy to solidify its leadership in the self-driving taxi industry across the United States. Additionally, Google has announced the rollout of new AI capabilities to its Search platform with the introduction of Gemini 2.5 Pro, offering advanced reasoning and research features. These updates are initially available to AI Pro and AI Ultra subscribers, enhancing the platform’s ability to handle complex queries and tasks.

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