Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Cantor Fitzgerald has raised its price target on Alphabet (NASDAQ:GOOGL) stock to $196.00 from $171.00 while maintaining a Neutral rating ahead of the company’s second-quarter 2025 results, due July 29. With a current market cap of $2.2 trillion and trading at an attractive PEG ratio of 0.53, InvestingPro analysis suggests the stock is currently undervalued.
The research firm expects Alphabet to exceed Wall Street estimates on both revenue and earnings per share, driven by strong performance in core search and YouTube businesses. The company has maintained impressive revenue growth of 13.07% over the last twelve months, with a robust gross margin of 58.59%. Cloud revenue growth is anticipated to approach mid-20% year-over-year, supported by increasing demand for AI inference.
Cantor Fitzgerald believes Alphabet could deliver operating margin leverage from operational efficiencies in the second quarter, despite increases in depreciation and amortization, infrastructure operating expenses, and compensation costs.
The firm notes Alphabet is making steady progress on data center build-out plans but suggests the company’s fiscal year 2026 capital expenditure guidance of $75 billion could trend higher given accelerated industry-wide buildout efforts.
Despite growing increasingly bullish on Alphabet’s competitive position in AI, Cantor Fitzgerald maintains its Neutral rating until gaining clarity on antitrust challenges, with a key ruling expected in August 2025.
In other recent news, Alphabet has seen its stock price targets raised by both Needham and BMO Capital. Needham increased its target to $210, emphasizing Alphabet’s strong position in digital advertising and the potential of generative AI to drive future growth. Meanwhile, BMO Capital raised its target to $208, citing optimism around Google AI products and an increase in Search and Cloud growth forecasts. In related developments, Rivian Automotive (NASDAQ:RIVN) announced a partnership with Google to integrate Google Maps into its navigation system, enhancing its in-vehicle technology offerings. Additionally, Google’s AI cybersecurity agent, Big Sleep, successfully thwarted a cybersecurity exploit, marking a significant achievement in AI-driven security measures. Advanced Micro Devices (NASDAQ:AMD) received a boost as the U.S. Department of Commerce allowed the company to resume shipments of its MI308X AI GPU to China, reversing previous export restrictions. This development is part of broader U.S. investments in AI and data centers, with companies like Google and Meta (NASDAQ:META) making significant financial commitments. These recent developments highlight ongoing advancements and strategic moves within the tech industry.
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