Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) drew largely bullish reactions from Wall Street after first-quarter results showed accelerating Search growth, a sharp Google Cloud ramp and evidence that AI investments are translating into revenue momentum.
- GOOGL stock is up after earnings. See the price action here.
Alphabet reported first-quarter revenue of $109.9 billion, up 22% year over year, with operating income of $39.7 billion and diluted EPS of $5.11.
Analysts focused on 19% Search growth, 63% Google Cloud growth to $20 billion, a near-doubling of Cloud backlog to more than $460 billion and management's higher 2026 capex outlook.
Alphabet shares rallied almost 8% Thursday, boosting their April gains to 31.4% ― putting the stock on track for its best month since October 2004.
Analyst Reactions
Needham analyst Laura Martin maintained a Buy rating and raised the price target to $450 from $400.
Martin said Alphabet's AI push could move the company deeper into commerce, writing: "GOOGL is Stalking AMZN's Core Business."
She added that Google's goal is to capture the full customer journey "from discovery to purchase," which could accelerate ad revenue and open up revenue-share opportunities from product sales.
J.P. Morgan analyst Doug Anmuth reiterated an Overweight rating and lifted the price target to $460 from $395.
"Google's full-stack AI benefits were on display in 1Q," Anmuth wrote, pointing to accelerating growth across Search, Cloud and total revenue.
The firm said Alphabet remains its "top overall pick," citing AI leadership, a differentiated full-stack approach and the ability to drive multi-year revenue and margin gains across Cloud and Services.
Rosenblatt analyst Barton Crockett maintained a Neutral rating while raising the price target to $393 from $357.
Crockett highlighted Cloud as the standout, writing that Alphabet's quarter featured "an explosive step up in Google Cloud backlog, auguring for stronger growth to come."
However, he also flagged that Alphabet's "free cash flow is limited now," as higher capex tempers the near-term cash-flow setup.
Goldman Sachs analyst Eric Sheridan reiterated a Buy rating and raised the 12-month price target to $450 from $400.
Sheridan said Alphabet's report showed the narrative around AI risk has "almost entirely flipped" from concern about disruption to evidence that AI at scale is repositioning the company's operating segments for sustained growth over the next 12-plus months.
Scotiabank analyst Nat Schindler reiterated a Sector Outperform rating and lifted the one-year target to $450 from $400.
Schindler called the print "another phenomenal quarter," saying Alphabet proved "once again that its full-stack AI approach is driving concrete monetization."
He said the company's Cloud backlog and 16 billion-plus tokens per minute validated the heavy AI spending, adding that "the ROI is evident."
The Takeaway
Taken together, Wall Street is increasingly comfortable with Alphabet's elevated AI spending as long as Search acceleration, Cloud backlog conversion and AI-driven monetization continue to show up in the numbers.
Rosenblatt remained more cautious on valuation and free cash flow, but even its Neutral-rated note raised estimates and the price target after the print.
GOOGL Price Action: Alphabet stock was up 7.8% at $376.96 at the time of publication Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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