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Investing.com - Citizens has reiterated its Market Outperform rating and $290.00 price target on Alphabet (NASDAQ:GOOGL), citing strong utilization of the company’s AI infrastructure. Alphabet shares are currently trading at $274.57, just shy of their 52-week high of $275.34, with the stock delivering an impressive 58% return over the past year according to InvestingPro data.
The firm highlighted comments from Google Cloud VP Amin Vahdat at the Runtime conference, where he stated that Google’s "7- and 8-year old TPUs have 100% utilization." This statement was rebroadcast via an A16Z podcast released earlier today.
Citizens noted this update emphasizes the intensity of AI demand and suggests the industry is still early in its growth cycle. The firm expressed increased confidence that Google Cloud Platform (GCP) revenue can accelerate as new data centers come online in the second half of 2025 and into 2026. This aligns with Alphabet’s overall revenue growth of 13.13% over the last twelve months, with the company generating $371.4 billion in total revenue.
The research firm pointed to higher utilization as a key driver of GCP margin expansion, as older chips are fully depreciated yet remain in use. This factor supports their positive outlook on the company’s cloud business.
Citizens maintained its Market Outperform rating on Alphabet stock based on greater confidence in Cloud’s ability to accelerate growth.
In other recent news, Alphabet has reported robust financial performance for the third quarter of 2025. The company achieved revenue of $102 billion, marking a 15% growth excluding foreign exchange effects, which surpassed analyst expectations by 3%. Operating income reached $34.7 billion, with a 33.9% margin that exceeded Street estimates by 7%. Piper Sandler highlighted a 16% revenue growth for Alphabet, noting strong performances in its Search, YouTube, and Cloud segments. Analysts have responded positively, with Evercore ISI raising its price target to $325, citing strong Q3 results, and maintaining an Outperform rating. Truist Securities also increased its price target to $320, attributing this to Alphabet’s stronger-than-expected quarterly performance. DA Davidson raised its price target to $300, focusing on the continued acceleration in Google Cloud services. Baird elevated its target to $310, emphasizing the positive impact of generative AI on Alphabet’s core businesses.
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