Key Highlights
- GOOGL shares declined 3.4% on Thursday, settling at $280.92—the weakest closing price since mid-November 2025, following a jury decision requiring Google and Meta to pay $6 million in a technology addiction case
- The stock continued its slide on Friday, dropping an additional 1.2% to reach $277.70, marking a weekly decline exceeding 7%
- Wells Fargo analysts upgraded their Alphabet price objective to $397 from the previous $387 target while reaffirming their Overweight stance
- The financial institution highlighted TPU processor licensing agreements with Anthropic and the $32 billion Wiz purchase as emerging growth catalysts
- Wells Fargo’s Ken Gawrelski stated that Alphabet “has all the pieces necessary to be an AI winner”
Alphabet experienced a 3.4% decline on Thursday, ending the trading session at $280.92—marking its weakest performance since November 14, 2025, according to Dow Jones Market Data. The downward momentum continued into Friday with another 1.2% drop to $277.70.
Thursday’s selloff followed a jury verdict against Google’s YouTube platform and Meta in litigation filed by a young plaintiff who alleged both technology companies deliberately engineered their applications to create addictive user behavior. The jury awarded $6 million in damages to the complainant. Meta’s shares tumbled nearly 8% on Thursday and extended losses with another 1.5% decline Friday, closing at $539.20.
The week’s downturn positions Alphabet for a cumulative weekly loss surpassing 7%.
However, Wells Fargo released an optimistic research report Friday morning. The investment bank elevated its Alphabet price objective to $397 from $387 while maintaining its Overweight recommendation. This revised target implies potential upside of 41% from Thursday’s closing level.
Investment Bank Highlights Emerging Revenue Opportunities
Analyst Ken Gawrelski authored the research note, observing that Google is “leveraging its compute capacity advantage to develop new profit pools.”
The Wells Fargo team identified two significant strategic initiatives. The first involves Google’s decision to license its tensor processing unit technology—referred to as TPUs—to artificial intelligence company Anthropic. The second is Alphabet’s $32 billion all-cash purchase of cybersecurity provider Wiz, finalized on March 11.
Wells Fargo projects that TPU licensing arrangements will contribute an incremental 4% to Google Cloud Platform revenues during 2026, expanding to 7% throughout 2027. From an operational profitability perspective, the bank anticipates a 6% enhancement in 2026 followed by 14% in 2027. The Wiz transaction is projected to deliver substantial additional contributions.
Gawrelski noted he’s “more comfortable with Google’s competitive position in search, given progress with AI mode and Gemini adoption.”
Wall Street Firm: Google Parent Positioned for AI Leadership
The Wells Fargo research team emphasized that Alphabet “has all the pieces necessary to be an AI winner.”
This represents a significant endorsement considering the competitive challenges Google Search has encountered from AI-driven competitors throughout the previous year.
Alphabet’s shares have retreated more than 17% from their 52-week peak. According to Wells Fargo’s analysis, the current valuation represents a considerable discount relative to the firm’s estimated intrinsic value.
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