Key Highlights
- Alphabet reached unprecedented stock price levels following 22% Q1 revenue growth to $109.9 billion
- Earnings per share of $5.11 nearly doubled the $2.64 Wall Street estimate
- Cloud division revenue exploded 63% to $20 billion, while backlog approached doubling to $460 billion
- Bank of America elevated price target to $430; Wall Street consensus target stands at $397.48
- Company increased 2026 capital expenditure outlook to $180–$190 billion for AI expansion
Shares of Alphabet touched a record peak of $385.84 Thursday following the technology giant’s first-quarter earnings report that substantially exceeded analyst projections.
Quarterly revenue reached $109.9 billion, representing a 22% increase from the previous year. Earnings per share landed at $5.11, significantly surpassing the $2.64 Wall Street consensus forecast.
The equity was changing hands around $384.28 throughout Thursday’s trading session, placing the company’s market capitalization near $4.65 trillion.
Google Search generated $60.4 billion in revenue, marking a 19% year-over-year increase. These figures directly counter worries that emerging AI chatbots from competitors such as OpenAI and Anthropic might diminish search engine usage.
During the quarterly conference call, CEO Sundar Pichai addressed these concerns head-on. “Users are embracing our artificial intelligence features including AI Mode and AI overviews, which is driving increased search engagement,” he stated.
Cloud Division Delivers Exceptional Growth
The Cloud business emerged as the quarter’s strongest performer. Revenue skyrocketed 63% to reach $20 billion, while the segment’s outstanding order backlog nearly doubled, exceeding $460 billion.
“Our Cloud business experienced another quarter of accelerated growth driven by robust customer appetite for our AI offerings and infrastructure capabilities,” Pichai explained.
Company-wide operating income climbed 30% to $39.7 billion. Net income surged 81% to $62.6 billion, receiving a partial boost from positive investment performance.
Analysts Elevate Price Forecasts
The impressive quarterly performance prompted numerous Wall Street firms to increase their price projections.
Bank of America boosted its price objective from $370 to $430 while reaffirming its buy recommendation. This represents approximately 11.9% potential appreciation from present trading levels.
Susquehanna increased its forecast to $460. KeyCorp established a $425 target accompanied by an overweight rating. Rothschild & Co Redburn elevated its projection to $430.
The aggregate analyst sentiment currently registers as “Moderate Buy,” with a mean price target of $397.48.
Among analysts tracking GOOGL, 47 maintain buy ratings, two assign strong buy recommendations, and four rate it as hold. Wall Street Zen represents one of the rare downgrades, shifting to hold during mid-April.
Accompanying the robust results, management expanded its capital investment blueprint. Annual capital expenditure guidance was increased to $180–$190 billion, elevated from the previous $175–$185 billion forecast.
CFO Anat Ashkenazi justified the adjustment: “We’re witnessing extraordinary demand from both internal operations and external customers for AI computational capacity.”
This magnitude of investment is attracting scrutiny. Although investors celebrated this quarter’s expansion, substantial capital spending could constrain free cash flow generation should revenue momentum decelerate.
Regarding regulatory matters, Italian authorities have requested EU examination of Google’s artificial intelligence search capabilities, while Swiss regulators launched a separate inquiry into keyword-bidding procedures. These investigations introduce regulatory uncertainty for upcoming quarters.
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 extends from $147.84 to $385.84, illustrating the substantial appreciation over the trailing twelve months.
