Wells Fargo cut its Alphabet price target to $416 from $435 while keeping the stock a top pick, pointing to updated long-term revenue assumptions and higher infrastructure spending. The brokerage still rates Alphabet Overweight and raised its near-term cloud and search growth forecasts.
Wells Fargo lowered its Alphabet price target to $416 from $435, yet kept the stock among its top picks. The brokerage tied the cut to updated long-term revenue assumptions and heavier infrastructure spending.
Even so, the near-term picture looks stronger. Wells Fargo said Google Cloud keeps drawing strong demand, which prompted it to lift its second-quarter cloud revenue growth forecast to 72% from the previous Street expectation of 65%. The firm also expects search revenue to rise 17% year over year in the quarter, and 16% for fiscal 2026.
The longer view is where the caution shows. Wells Fargo lifted its 2026 revenue estimate to $517 billion and raised its free cash flow forecast to $47 billion, but it cut projections for fiscal 2027 and 2028 revenue. The brokerage expects external sales of Google's tensor processing units to begin contributing in the second half of 2026, though it anticipates higher capital spending will pressure future cash flow.
The revised valuation rests on 27.5 times Wells Fargo's estimated fiscal 2027 GAAP earnings per share of $15.14, with the firm holding its Overweight rating. Shares of Alphabet edged up about 1% in early Thursday trading.
Source: TradingView
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