Roth Capital Markets analyst Rohit Kulkarni maintained a “Purchase” ranking and raised his 12-month goal to US$265.00 (from US210.00) for Alphabet (Alphabet Inventory Quote, Chart, Information, Analysts, Financials NASDAQ:GOOGL) in an Oct. 16 earnings preview, saying the corporate’s cloud momentum and AI investments proceed to assist a constructive long-term outlook regardless of near-term headline dangers.
Kulkarni famous that Alphabet will report third-quarter earnings on Oct. 29 after market shut.
“We’re elevating our Google Cloud progress assumptions following the latest US$10-billion contract with Meta and the corporate’s robust AI cloud product bulletins, together with its quadrillion-tokens milestone,” he stated. “At US$250 per share, GOOGL trades at roughly 23× 2026E P/E, placing it in ‘no man’s land ’; a balanced danger/reward setup by means of year-end.”
He added that whereas Meta and Amazon stay his prime two mega-cap picks, Alphabet is his third heading into 2026.
Kulkarni stated he has raised third- and fourth-quarter income forecasts primarily as a consequence of stronger anticipated contributions from Google Cloud Platform, although he has trimmed EPS estimates to mirror the €2.95-billion high quality imposed by the European Fee for “self-preferencing” practices in Google’s ad-tech operations.
“We’re modelling a one-time high quality cost accrual associated to the EC ruling, which impacts near-term profitability,” he stated. “Nevertheless, the underlying cloud and AI-driven progress story stays intact.”
On the outlook for Search, Kulkarni acknowledged potential volatility.
“OpenAI’s latest product and partnership bulletins might pave the best way for an advertisements rollout in 2026,” he stated. “If Amazon’s one-month pause of Google advertisements is any indication, Search might have a bumpy street forward.”
Nonetheless, he famous that AI Overviews are being monetized at roughly the identical fee as conventional outcomes, supported by greater cost-per-clicks regardless of fewer total queries.
Kulkarni stated Google Cloud continues to realize share within the AI infrastructure market, with enterprise adoption accelerating.
“The six-year, US$10-billion cloud cope with Meta underscores the strategic significance of GCP,” he stated. “Constructing on prime of Gemini gives enterprise clients with flexibility and efficiency benefits in each coaching and inference workloads.”
He added that regulatory headwinds look like easing.
“Following Decide Mehta’s delicate treatments within the U.S. Search trial and restricted traction within the ad-tech treatments section, we imagine the chance of a Google Adverts or AdX divestiture has decreased,” he stated. “That stated, the EC high quality displays ongoing scrutiny of Google’s aggressive practices.”
Wanting forward, Kulkarni expects administration to sign greater capital expenditures.
“Consensus continues to underestimate CapEx depth,” he stated. “Google raised its 2025 CapEx information from US$74-billion to US$85-billion within the second quarter, and we anticipate that development to proceed as AI workloads scale and provide visibility improves into 2026 and 2027.”
“Whereas near-term volatility round regulation and AI competitors persists, Alphabet’s infrastructure scale, accelerating cloud share, and monetization effectivity maintain it properly positioned to profit from AI adoption,” he stated. “We increase our worth goal to US$265 and keep our Purchase ranking.”
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