JPMorgan analyst Doug Anmuth reiterated an Overweight rating and a $395 price forecast for Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) in a Monday research note.

The firm named the tech giant a “Top Pick” just days before the Google Cloud Next event in Las Vegas.

Cloud Growth Takes Center Stage

Anmuth highlighted Google Cloud’s rising importance to Alphabet’s bottom line. The segment is now the company’s second-largest business. JPMorgan expects Cloud to represent roughly 19% of total revenue in 2026.

The analyst noted that the Cloud backlog surged 160% year-over-year to $240 billion in late 2025. “While Cloud Next has not been a major catalyst for GOOG/L shares in the past, we believe the event carries more weight this year,” Anmuth wrote.

Transition To The ‘Agentic’ Cloud

JPMorgan expects the upcoming conference to focus on “Agentic Cloud.” This involves AI agents coordinating multi-step workflows. Anmuth believes these agents make Google Cloud usage “recurring & much harder for customers to rip out.”

This shift supports the analyst’s projection for margin expansion. JPMorgan models Cloud operating margins hitting 27.9% in 2026. This growth comes despite heavy infrastructure spending.

Massive Capex And Strategic Acquisitions

Alphabet is leaning into heavy capital expenditures. The company’s 2026 guide sits between $175 billion and $185 billion. Anmuth noted that recent deals for Wiz worth $32 billion and Intersect Power worth $4.75 billion strengthen Google’s position.

The Wiz deal signals that security is a “top strategic priority.” Meanwhile, Intersect Power provides solar and battery storage to bypass grid congestion.

Stock Price Activity: Alphabet shares were down 0.86% at $338.73 at the time of publication on Monday, according to Benzinga Pro data.

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