Key Takeaways
- Alphabet shares declined 3.4% on Thursday, settling at $280.92—the stock’s weakest closing price since mid-November 2025, following a jury verdict requiring Google and Meta to pay $6 million in a social media addiction case
- GOOGL continued its descent on Friday, losing another 1.2% to close at $277.70, marking a weekly decline exceeding 7%
- Wells Fargo elevated its Alphabet price objective to $397 from the previous $387 target while reaffirming its Overweight stance
- The financial institution highlighted TPU processor licensing agreements with Anthropic and the recently completed $32 billion Wiz purchase as emerging growth catalysts
- Wells Fargo analyst Ken Gawrelski stated that Alphabet “has all the pieces necessary to be an AI winner”
Alphabet experienced a 3.4% decline on Thursday, finishing trading at $280.92—marking its weakest performance since November 14, 2025, according to Dow Jones Market Data. The downturn continued into Friday with an additional 1.2% loss, bringing the stock to $277.70.
Thursday’s selloff was triggered when a jury delivered a verdict against Google’s YouTube and Meta in litigation filed by a young plaintiff alleging both platforms engineered their applications to create addictive behavior. The jury awarded $6 million in damages to the complainant. Meta’s stock tumbled nearly 8% on Thursday and extended losses with another 1.5% drop Friday, closing at $539.20.
The recent weakness has positioned Alphabet for a weekly decline surpassing 7%.
However, amid the downturn, Wells Fargo issued an optimistic assessment Friday morning. The investment bank increased its Alphabet price objective to $397 from $387 while maintaining its Overweight recommendation. This revised target implies a potential 41% gain from Thursday’s closing level.
Wells Fargo Highlights Emerging Revenue Opportunities
Analyst Ken Gawrelski authored the research note, stating that Google is “leveraging its compute capacity advantage to develop new profit pools.”
The Wells Fargo team identified two strategic initiatives as particularly significant. First, Google’s decision to license its tensor processing unit technology—commonly referred to as TPUs—to Anthropic. Second, Alphabet’s $32 billion all-cash purchase of cloud security provider Wiz, which was finalized on March 11.
Wells Fargo projects that TPU licensing arrangements will contribute 4% to Google Cloud Platform revenues during 2026, expanding to 7% in 2027. From an operating income perspective, the bank anticipates a 6% enhancement in 2026 and a 14% lift in 2027. The Wiz integration is expected 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.”
Analyst: Alphabet Positioned to Dominate AI Space
The Wells Fargo research team emphasized that Alphabet “has all the pieces necessary to be an AI winner.”
This assertion carries particular weight considering the competitive challenges Google Search has encountered from AI-driven alternatives throughout the past year.
Alphabet’s shares have now retreated more than 17% from their 52-week peak. According to Wells Fargo’s analysis, the current valuation represents a significant markdown from the firm’s calculated fair value.
