Key Takeaways
- Alphabet shares have climbed 23% year-to-date in 2026 and gained 135% over the trailing 12-month period
- First-quarter earnings per share reached $5.11, nearly doubling the $2.68 Wall Street estimate; total revenue exceeded $109.9B
- Google Cloud expanded approximately 63% with revenue commitments jumping to $468B from $243B
- J.P. Morgan elevated its price objective to $460 while maintaining an Overweight stance
- Nearly 86% of Wall Street analysts tracking GOOGL recommend buying the stock
Alphabet shares dipped 0.9% to approximately $382.20 during Monday’s session, yet this minor pullback masks what many consider one of the most impressive quarterly performances this earnings cycle.
First-quarter earnings per share registered at $5.11, dramatically exceeding the analyst consensus of $2.68 by more than 90%. Total quarterly revenue reached $109.9B, representing a 21.8% year-over-year increase and surpassing the Street’s $106.96B projection.
The numbers spoke for themselves.
Google Cloud emerged as the clear winner. This business segment posted approximately 63% growth, generating roughly $20B in quarterly revenue. However, the division’s impact on Alphabet’s committed revenue pipeline proved even more remarkable.
Alphabet’s overall revenue backlog ballooned to $468B during the first quarter, representing a near-doubling from the previous quarter’s $243B figure. Cloud services account for 99% of this commitment total, with management projecting that over half will materialize as recognized revenue within the next 24 months.
Doug Anmuth, analyst at J.P. Morgan, described the backlog expansion as “the single-most impressive metric this earnings season thus far.”
The investment bank maintained its Overweight recommendation while increasing its price objective to $460 from the previous $395 level. Anmuth emphasized that GOOGL continues to represent the firm’s “top overall pick” and suggested the shares could appreciate further through both earnings estimate increases and valuation multiple expansion.
Over 40 Wall Street analysts upgraded their price projections following the earnings disclosure. Among the 74 research firms monitored by FactSet, 86% assign Buy-equivalent ratings to the stock.
Search Business Momentum Builds
Core search advertising revenue expanded 19% compared to the year-ago period during Q1, marking the fourth straight quarter of improving growth rates. J.P. Morgan indicated this trend validates Alphabet’s argument that artificial intelligence capabilities are enhancing rather than undermining the search business.
Additional firms expressing optimism include TD Cowen, Scotiabank, Raymond James, and Piper Sandler, each of which increased their price targets post-earnings.
Some analysts remain cautious. D.A. Davidson maintained its Neutral stance, raising its target to $375 from $310 while observing that the exceptional results are “well reflected in the current valuation.”
Infrastructure Investment Spending Under Scrutiny
Alphabet provided guidance for 2026 capital expenditures in the $185–190B range, with management signaling additional increases anticipated for 2027. J.P. Morgan emphasized that elevated infrastructure spending will be necessary to fulfill the massive cloud backlog, and investors will closely monitor the pace at which these commitments convert to actual booked revenue.
Hardware sales are becoming increasingly significant. D.A. Davidson observed that sales of Tensor Processing Units (TPUs) to cloud clients have significantly contributed to backlog growth, though questions remain regarding the profitability structure of these arrangements.
Alphabet also announced a dividend increase to $0.22 per share from the prior $0.21, with payment scheduled for June 15.
The stock’s 52-week peak stands at $383.39, placing shares within striking distance of potentially surpassing Nvidia for the title of world’s most valuable publicly traded company, with current market capitalization sitting at $4.64 trillion.
B. Metzler seel. Sohn & Co. AG expanded its Alphabet position by 16.5% during the fourth quarter, bringing its holdings to 322,820 shares valued at approximately $101.3M, representing the firm’s 22nd-largest investment.
