Key Highlights
- Alphabet reached a new record high following Q1 revenue growth of 22% to $109.9 billion
- Earnings per share of $5.11 exceeded analyst expectations of $2.64
- Google Cloud division posted 63% revenue growth to $20 billion, while backlog expanded to $460 billion
- Bank of America increased price target to $430; average analyst target stands at $397.48
- The company boosted 2026 capital expenditure forecast to $180–$190 billion for AI investments
Alphabet shares climbed to a record high of $385.84 on Thursday following first-quarter financial results that exceeded analyst projections across multiple metrics.
Quarterly revenue reached $109.9 billion, representing a 22% increase from the prior year period. Earnings per share landed at $5.11, surpassing the analyst consensus of $2.64 by a significant margin.
Shares traded around $384.28 during Thursday’s trading session, bringing the company’s market capitalization to approximately $4.65 trillion.
Google Search delivered $60.4 billion in revenue, representing 19% growth. The performance addresses market concerns about competitive pressure from AI chatbot platforms developed by companies such as OpenAI and Anthropic.
CEO Sundar Pichai addressed market concerns during the earnings conference call. “People love our AI experiences like AI Mode and AI overviews, and they’re coming back to search more,” he said.
Cloud Division Delivers Robust Performance
Google Cloud emerged as the quarter’s strongest performer. The division generated $20 billion in revenue, marking 63% growth, while the order backlog expanded to over $460 billion from its previous level.
“Cloud accelerated again this quarter due to strong demand for our AI products and infrastructure,” Pichai noted.
Company-wide operating income increased 30% to $39.7 billion. Net income climbed 81% to $62.6 billion, receiving a boost from gains on investments.
Analyst Community Responds With Higher Targets
The quarterly performance prompted numerous analysts to revise their price targets upward.
Bank of America moved its target from $370 to $430 while maintaining a buy rating. The new target suggests approximately 11.9% potential appreciation from current trading levels.
Susquehanna announced a target of $460. KeyCorp established a $425 target accompanied by an overweight rating. Rothschild & Co Redburn set its target at $430.
Analyst consensus currently reflects a “Moderate Buy” rating, with an average price target of $397.48.
Among analysts tracking GOOGL, 47 maintain buy ratings, two rate it a strong buy, and four assign hold ratings. Wall Street Zen represents one of the few recent downgrades, moving to hold in mid-April.
Management responded to strong results by expanding investment plans. Full-year capital expenditure guidance was elevated to $180–$190 billion from the previous range of $175–$185 billion.
CFO Anat Ashkenazi provided context for the adjustment: “We are seeing unprecedented internal and external demand for AI compute resources.”
The elevated spending level has attracted scrutiny. While investors responded positively to quarterly growth, substantial capital expenditure commitments could impact free cash flow if revenue expansion moderates.
Regulatory developments continue to emerge. Italy has requested EU review of Google’s AI search capabilities, while Switzerland has launched an investigation into keyword-bidding practices. These regulatory matters introduce legal uncertainty for upcoming quarters.
Institutional ownership remains substantial at 40.03% of outstanding shares. Multiple institutional investors have expanded their holdings in recent quarters, including CIBC Bancorp USA, which established a new position valued at approximately $416 million.
Alphabet’s 52-week trading range now spans from $147.84 to $385.84, illustrating the stock’s substantial appreciation over the past twelve months.
