Alphabet stock price target raised to $220 from $195 at TD Cowen

Investing.com - TD Cowen raised its price target on Alphabet (NASDAQ:GOOG) to $220.00 from $195.00 on Friday, while maintaining a Buy rating on the stock. According to InvestingPro data, 27 analysts have recently revised their earnings estimates upward for the upcoming period, signaling strong confidence in the company’s prospects.

The research firm cited Alphabet’s revenue beat, which came in 3% above consensus estimates, with Search and Cloud segments exceeding expectations by 2% and 4% respectively. Operating income was 6% above consensus, excluding a one-time legal charge. The company’s strong performance is reflected in its impressive $371.4 billion trailing twelve-month revenue, with a healthy revenue growth rate of 13.13%.

Cloud revenue accelerated to 32% year-over-year growth, which TD Cowen attributed to ramping artificial intelligence and non-AI workload growth. Management raised its 2025 capital expenditure guidance to $85 billion from $75 billion previously, citing AI infrastructure build-out.

The firm noted that AI Overviews reached 2 billion monthly active users, which is driving overall search query growth higher. This AI-driven growth in both Search and Cloud segments contributed to TD Cowen’s decision to raise long-term estimates.

TD Cowen adjusted its long-term estimates, including capital expenditure projections, resulting in the higher price target while maintaining its Buy recommendation on Alphabet stock.

In other recent news, Google (NASDAQ:GOOGL) has secured a significant $1.2 billion cloud-computing deal with ServiceNow (NYSE:NOW), marking a major achievement for Google Cloud as it competes against Amazon (NASDAQ:AMZN) Web Services and Microsoft (NASDAQ:MSFT) Azure. Additionally, Google has launched a virtual try-on tool for clothing in the United States, now available across Google Search, Google Shopping, and Google Images, expanding its e-commerce capabilities. In the realm of artificial intelligence, Google unveiled Aeneas, a new AI model designed to assist historians in analyzing ancient Latin inscriptions, offering advanced features for text and image processing. Meanwhile, Raymond (NSE:RYMD) James has raised its price target for Alphabet to $210 from $185, maintaining an Outperform rating, citing progress in AI monetization as a key factor. In a competitive move, Meta Platforms (NASDAQ:META) has hired three AI researchers from Google DeepMind who previously contributed to the development of Google’s Gemini model. These developments highlight Google’s ongoing efforts in cloud services, AI innovation, and e-commerce advancements.

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