Quick Summary
- Alphabet reached record highs following a 22% revenue increase to $109.9 billion in Q1
- Earnings per share of $5.11 nearly doubled the $2.64 Wall Street estimate
- Google Cloud business exploded 63% to $20 billion, with backlog approaching $460 billion
- Bank of America lifted price target to $430; average analyst target stands at $397.48
- Company boosted 2026 capital expenditure outlook to $180–$190 billion for AI investments
Alphabet shares soared to a record peak of $385.84 Thursday following the technology giant’s first-quarter performance that significantly exceeded analyst projections.
The company reported quarterly revenue of $109.9 billion, representing a 22% increase from the prior year. Earnings per share reached $5.11, nearly doubling the Street’s $2.64 expectation.
Shares traded near $384.28 during Thursday’s trading session, pushing the company’s market capitalization to roughly $4.65 trillion.
Google Search generated $60.4 billion in revenue, marking a 19% climb. The results effectively countered worries that artificial intelligence chatbots from competitors such as OpenAI and Anthropic might erode search market share.
During the earnings discussion, CEO Sundar Pichai dismissed those concerns. “People love our AI experiences like AI Mode and AI overviews, and they’re coming back to search more,” he stated.
Cloud Division Drives Growth
The Google Cloud segment emerged as the quarter’s star performer. Revenue skyrocketed 63% to reach $20 billion, while the division’s contracted order backlog nearly doubled, exceeding $460 billion.
“Cloud accelerated again this quarter due to strong demand for our AI products and infrastructure,” Pichai noted.
Company-wide operating income climbed 30% to $39.7 billion. Net income surged 81% to $62.6 billion, partially driven by gains from strategic investments.
Analyst Community Responds
The exceptional results prompted widespread upward revisions to price targets among Wall Street analysts.
Bank of America elevated its price objective from $370 to $430 while keeping a buy recommendation. This target suggests approximately 11.9% potential appreciation from current trading levels.
Susquehanna increased its target to $460. KeyCorp established a $425 target alongside an overweight stance. Rothschild & Co Redburn boosted its target to $430.
The overall analyst consensus currently reflects a “Moderate Buy” recommendation, 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 rare downgrades, shifting to hold in mid-April.
Following the robust performance, management announced expanded investment initiatives. Full-year capital expenditure projections were raised to $180–$190 billion, up from the previous $175–$185 billion range.
CFO Anat Ashkenazi justified the increase: “We are seeing unprecedented internal and external demand for AI compute resources.”
This substantial spending commitment is garnering attention from investors. While the market applauded this quarter’s expansion, heightened capital expenditures could strain free cash flow if revenue momentum moderates.
Regarding regulatory matters, Italy has requested EU scrutiny of Google’s AI-powered search capabilities, while Switzerland launched a separate inquiry into keyword-bidding methodologies. These investigations introduce regulatory uncertainty for the coming months.
Institutional ownership remains robust at 40.03% of outstanding shares. Multiple institutional investors expanded their holdings recently, including CIBC Bancorp USA, which established a fresh position worth approximately $416 million.
Alphabet’s 52-week trading range now spans from $147.84 to $385.84, illustrating the substantial appreciation over the past twelve months.
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