Key Highlights
- Alphabet reached record highs following first-quarter revenue growth of 22% to $109.9 billion
- Earnings per share of $5.11 exceeded analyst expectations of $2.64 by more than double
- Google Cloud posted 63% revenue growth to $20 billion, with order backlog approaching $460 billion
- Bank of America boosted price target to $430; analyst consensus stands at $397.48
- Company increased 2026 capital spending forecast to $180–$190 billion for AI development
Shares of Alphabet reached a historic peak of $385.84 on Thursday following a first-quarter earnings report that significantly exceeded analyst projections.
The company reported quarterly revenue of $109.9 billion, representing a 22% increase from the same period last year. Earnings per share reached $5.11, substantially surpassing the $2.64 Wall Street consensus estimate.
During Thursday’s trading session, shares were changing hands near $384.28, giving the company a market capitalization of roughly $4.65 trillion.
Google Search generated $60.4 billion in revenue, marking a 19% increase. This performance effectively counters worries that artificial intelligence chatbots from competitors like OpenAI and Anthropic might diminish search usage.
During the earnings conference call, CEO Sundar Pichai addressed these concerns. “People love our AI experiences like AI Mode and AI overviews, and they’re coming back to search more,” he stated.
Cloud Business Delivers Outstanding Growth
The Google Cloud division emerged as this quarter’s star performer. Revenue climbed 63% to reach $20 billion, while the segment’s order backlog expanded to over $460 billion, nearly twice the previous level.
“Cloud accelerated again this quarter due to strong demand for our AI products and infrastructure,” Pichai commented.
The company’s operating income increased 30% to $39.7 billion. Net income jumped 81% to $62.6 billion, with investment gains contributing to the growth.
Analyst Community Elevates Expectations
The strong quarterly performance prompted numerous analysts to revise their price targets upward.
Bank of America increased its target from $370 to $430 while maintaining its buy recommendation. This new target suggests approximately 11.9% upside potential from current trading levels.
Susquehanna elevated its target to $460. KeyCorp established a $425 target with an overweight stance. Rothschild & Co Redburn increased its target to $430.
The overall analyst consensus rating currently sits at “Moderate Buy,” with an average price target of $397.48.
Among analysts following GOOGL, 47 maintain buy ratings, two hold strong buy ratings, and four have assigned hold ratings. Wall Street Zen represents one of the few recent downgrades, shifting to hold in mid-April.
Following these impressive results, management announced expanded investment plans. The company raised its full-year capital expenditure guidance to a range of $180–$190 billion, up from the previous $175–$185 billion forecast.
CFO Anat Ashkenazi justified the increase: “We are seeing unprecedented internal and external demand for AI compute resources.”
This spending level has garnered significant attention. Although investors have rewarded the company’s growth this quarter, such substantial capital expenditures could pressure free cash flow should revenue expansion decelerate.
Regarding regulatory matters, Italian authorities have requested EU investigation of Google’s AI search features, while Swiss regulators have launched a separate inquiry into keyword-bidding practices. These investigations introduce regulatory uncertainty for the coming months.
Institutional ownership remains robust at 40.03% of outstanding shares. Multiple institutional investors have expanded their holdings recently, including CIBC Bancorp USA, which established a new 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 year.
