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Investing.com - Cantor Fitzgerald has raised its price target on Alphabet (NASDAQ:GOOGL) stock to $310.00 from $265.00 while maintaining a Neutral rating following the company’s third-quarter results.
Alphabet reported third-quarter revenues and EBIT (excluding EU fine) that exceeded Street estimates by 2% and 8% respectively, according to Cantor Fitzgerald analyst Deepak Mathivanan. Revenue growth accelerated across several segments including search and Google Cloud Platform, driven by AI deployments throughout the company’s products.
The tech giant’s third-quarter EBIT margin (excluding fine) expanded by 160 basis points compared to 150 basis points in the second quarter, despite acceleration in depreciation costs. This margin improvement comes as Alphabet continues to maintain tight controls on fixed costs.
Alphabet has increased its fiscal year 2025 capital expenditure guidance at the high end to $93 billion, representing a 77% year-over-year increase, up from the previous guidance of $85 billion. The company attributes this elevated spending to increasing demand for AI compute in core services and Cloud.
Cantor Fitzgerald notes that while the increased capital expenditures are pressuring free cash flow growth in the near term, these investments are already generating strong returns with accelerating revenue growth. The firm has raised its fiscal year 2026 EPS estimate by 5%, resulting in the new price target of $310.
In other recent news, Alphabet has seen a series of positive developments, particularly in its financial performance and analyst evaluations. The company reported quarterly revenue exceeding $100 billion for the first time, with an operating income margin of 33.9%, excluding a $3.5 billion fine from the European Commission. This strong performance has led several firms to raise their price targets for Alphabet. KeyBanc increased its target to $330, citing Alphabet’s advantage in AI and product innovation. Rosenblatt raised its target to $279, highlighting the strength of Google Cloud as a standout segment. Stifel set a new target of $333, noting the impressive growth in Google Cloud’s revenue and backlog. HSBC also raised its target to $335, pointing to a 43.3% increase in Google Cloud’s revenue backlog. Canaccord Genuity updated its target to $330, reflecting the company’s robust third-quarter results.
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