Alphabet Inc. (GOOGL) has been rated "Outperform" by Wedbush, with a revised 12-month price target of $220, up from $190.71. This update follows Alphabet's mixed Q4 results, where revenue slightly missed expectations at $96.5B, but operating income exceeded forecasts at $31.0B, reflecting a 32.1% margin. The report highlights robust advertising performance, with Google Search and YouTube Ads surpassing consensus growth estimates by 150bps and 260bps, respectively. However, Google Cloud's growth decelerated to 30.1% y/y, below the expected 32.6%.
Wedbush's investment thesis is bolstered by Alphabet's strategic focus on AI and cloud infrastructure, with plans to invest approximately $75B in capex for 2025, significantly above the consensus of $59B. This investment aims to address capacity constraints and support AI-driven growth. The report notes, "We continue to see a favorable risk/reward for Alphabet and think there is a case for multiple expansion in the coming quarters."
Alphabet's current stock price is $192.12, reflecting a 6.91% decrease from the previous close.