TLDR
- Michael Morris at Guggenheim increases Alphabet price target to $375 from $330
- Google Cloud backlog surges to $155 billion with 46% sequential growth rate
- Analyst projects Wall Street underestimates Cloud revenue by about $40 billion
- YouTube and Gemini AI platform show strong momentum in monetization and adoption
- Stock has gained 68% in 2025 and added 13% in the past 30 days
Alphabet scored a major price target boost from Guggenheim. Michael Morris lifted his target to $375 while reaffirming his Buy rating on the stock.
The upgrade follows impressive Google Cloud performance. The unit ended Q3 with a $155 billion backlog, representing 46% growth from the prior quarter.
Morris sees opportunity that others are missing. He estimates consensus forecasts undervalue Cloud revenue potential by approximately $40 billion based on backlog trends.
Enterprise clients are racing to deploy AI solutions. Google Cloud is capturing a large share of that corporate spending wave.
Investors have already seen strong gains. Shares rallied 68% year-to-date and posted 13% returns over the last month.
Cloud Platform Leads Growth Story
Morris pointed to three key factors behind his bullish stance. Google Cloud leads with exceptional backlog growth powered by enterprise AI demand.
That $155 billion figure represents committed future revenue. As those contracts convert to sales, Cloud segment numbers should climb substantially.
YouTube continues its dominance in streaming viewership. The platform is also getting better at turning views into advertising revenue.
Google’s Gemini AI platform completes the growth picture. The model is attracting users rapidly and establishing credibility as a serious AI competitor.
News that Meta might adopt Google’s Tensor Processing Units added optimism. Such hardware partnerships could open fresh revenue channels.
Financial Forecasts Move Higher
Morris revised his 2026 and 2027 projections upward. The changes primarily reflect elevated Google Cloud revenue expectations and assumptions about margin expansion.
He believes leading tech companies will produce outsized growth heading into next year. Morris anticipates Alphabet will exceed Street estimates.
The broader analyst community leans positive on the stock. Alphabet carries a Strong Buy rating with 31 Buy calls and seven Hold recommendations.
Yet the average price target sits at $314.71. That suggests most analysts see shares as fairly valued right now. Morris’s $375 target stands well above that consensus view.
TD Cowen stuck with its Buy rating and $335 target after Google unveiled Gemini 3. The advanced language model now works across multiple company offerings.
AI Spending Powers Multiple Segments
Cloud revenue has accelerated as enterprises embrace AI tools and infrastructure. Google recently launched Nano Banana Pro with enhanced image generation features.
The backlog number matters beyond just its size. Sequential growth of 46% indicates strong momentum in deal signings and customer commitments.
Companies are locking in multi-year cloud agreements. They need infrastructure capacity and AI capabilities to stay competitive.
Morris sees AI reshaping business, advertising, and consumer markets. He thinks Alphabet is positioned to benefit from these transformations.
His updated revenue projections center on Google Cloud’s trajectory. The analyst also expects operating margins to improve as the business scales.
Market reports suggest Meta Platforms could use Google’s specialized AI chips in its data centers, potentially creating another growth avenue for Alphabet.
Google Cloud finished Q3 with a $155 billion backlog, up 46% sequentially, reflecting surging enterprise demand for AI infrastructure.
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