UBS lifts Alphabet stock price target to $186 from $173

On Friday, UBS analyst Stephen Ju revised the price target on Alphabet Inc. (NASDAQ:GOOGL) shares, increasing it to $186 from the previous $173. The firm has chosen to maintain a Neutral rating on the stock. According to InvestingPro data, analysts’ targets for Alphabet range from $159 to $240, with the stock currently trading at attractive valuations with a PEG ratio of 0.5, suggesting good value relative to its growth potential.

The adjustment comes in the wake of Alphabet reporting first-quarter year-over-year (YOY) revenue growth of 10% in its Search business, surpassing the expectations of both investors, who predicted an 8% increase, and the consensus estimate of 9%. This performance has been interpreted as a sign of resilience in the face of challenging macroeconomic conditions. The company’s overall financial health is rated as GREAT by InvestingPro, with robust metrics including a 58.2% gross profit margin and strong cash flows.

Alphabet’s confirmation of its $75 billion capital expenditure (CapEx) guidance for the year is also seen as an encouraging indication of a positive revenue outlook. Despite these favorable developments, UBS noted that consumer sentiment appeared to be weakening in April compared to the first quarter of 2025. Moreover, Alphabet has recognized the potential impact of macroeconomic changes and warned of headwinds from advertising in the Asia-Pacific region due to changes in minimal rule regulations.

While these factors have not led to significant adjustments in UBS’s revenue projections for 2025 and 2026, the firm has updated its earnings per share (EPS) estimates. Alphabet’s signal of intent to reduce personnel costs and improve efficiencies, particularly in the face of anticipated higher depreciation and amortization (D&A) resulting from increased CapEx, has been factored into the revised projections. As a result, UBS anticipates approximately a 7% increase in EPS for 2026 and 2027. This outlook has contributed to the raised price target for Alphabet shares.

In other recent news, Alphabet Inc. has seen several analyst updates following its first-quarter earnings report. Stifel analysts raised their price target for Alphabet shares to $200, noting slightly better-than-expected advertising revenue and steady performance in YouTube and Cloud revenues. Oppenheimer also increased its price target to $200, citing confidence in Alphabet’s management and the positive impact of AI on operations, with earnings per share exceeding expectations by 7%. Truist Securities maintained a Buy rating with a $200 price target, highlighting Alphabet’s robust results in Search, YouTube, and Cloud services despite competition in AI and economic challenges.

Meanwhile, Pivotal Research Group reiterated its Buy rating with a $225 target, emphasizing Alphabet’s strong market position and potential to leverage AI investments for financial growth. Bernstein adjusted its price target from $165 to $185 while keeping a Market Perform rating, reflecting a cautious view of Alphabet’s strategic responses to economic pressures and technological advancements. Analysts have noted Alphabet’s focus on AI, with its Gemini platform reportedly having over 1.5 billion monthly users and AI monetization on par with traditional search revenue.

Alphabet’s capital expenditures are projected to be around $75 billion for 2025, aimed at optimizing Cloud services. The company’s diverse assets, including YouTube and investments in Waymo and quantum computing, position it well for continued growth. Despite potential regulatory challenges, analysts remain optimistic about Alphabet’s ability to maintain market leadership and capitalize on its technological advancements.

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