Quick Read
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Alphabet (GOOG) earns a BUY with a $423.95 price target as Google Cloud grew 82% and its backlog hit $514 billion.
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Alphabet trades at just 13x trailing earnings versus Microsoft (MSFT) at 29x and Meta (META) at 24x, while growing revenue faster than both.
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The 24/7 Wall St. price target for Alphabet (NASDAQ:GOOG) is $423.95. That means 32.17% upside from the prior close of $320.76. The stock gets a buy rating with 70% confidence, which we read as solid conviction with a margin for error.
Applied to Alphabet’s $4.05 trillion market cap, that upside works out to about $1.3 trillion in added market value. That figure is the opportunity behind our headline.
Google Stock Pulls Back Even as Cloud Growth Accelerates
Shares fell 7.82% over the past week and 8.49% over the past month. Early Friday they traded at $317.93, up just 1.51% year to date and about 21% below the 52-week high of $403.96. Over the past year the stock is still up 26.23%.
The fundamentals point the other way. In Q2, revenue rose 24.2% to $119.80 billion, ahead of the $116.91 billion estimate. EPS came in at $9.11 against a $3.04 estimate, although a $99.03 billion equity securities gain inflated that number. Google Cloud grew 82%, and its backlog reached $514 billion.
Why Bulls See a Breakout to $442
Cloud is now a profit engine. Its operating margin expanded to 35.6% from 20.7% a year earlier. The Gemini app has 950 million monthly users, and nearly 90% of the Fortune 100 use Gemini Enterprise.
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Waymo has passed 500,000 fully autonomous rides a week. On the Q2 call, CEO Sundar Pichai said, “If anything, over the past year, we’ve gotten more bullish on the opportunities ahead.”
