Quick Summary
- Alphabet shares jumped 2.8% to $356.47 during Monday morning trading, just ahead of its Q2 2026 earnings release
- BMO Capital lifted its price target to $455 while keeping an Outperform rating on the stock
- KeyBanc set a $445 target, forecasting over 20% revenue growth for Google Cloud and Search through 2028
- Reports indicate Google is building a server chip called “Frozen v2,” which could be 6-10x more efficient than existing TPUs
- Google Cloud reported a Q1 2026 backlog of approximately $462 billion, nearly doubling quarter-over-quarter
Shares of Alphabet advanced 2.8% during Monday’s morning session, reaching $356.47, as market participants positioned themselves ahead of the tech giant’s second-quarter 2026 earnings announcement scheduled for Wednesday, July 22, after market close.
The upward momentum follows several bullish analyst calls that have reinforced positive sentiment. On July 17, BMO Capital increased its price objective to $455 from a previous $435 target, maintaining its Outperform stance despite news suggesting delays in launching the Gemini 3.5 Pro model.
KeyBanc established a $445 price target, with analyst Justin Patterson maintaining that market expectations undervalue the sustained growth potential of both Google Cloud and Search operations. He forecasts revenue expansion exceeding 20% annually through 2028.
Meanwhile, Bank of America reaffirmed its $430 target and slightly increased its Q2 earnings-per-share projection ahead of the quarterly report.
Next-Generation “Frozen v2” Chip in Development
Further boosting Monday’s stock performance, The Information published a report revealing that Google is developing an advanced server chip internally referred to as “Frozen v2.” Sources with knowledge of the project indicate the chip could deliver efficiency improvements ranging from six to ten times better than Google’s existing tensor processing units.
The efficiency gains are measured by tokens served per unit of energy consumed—a critical performance metric for AI infrastructure where power consumption represents a significant operational expense.
Team members involved in the project indicated the chip may be embedded directly within the Gemini AI model architecture, eliminating the need for separate hardware components. The technology is projected to be production-ready by 2028.
When contacted by Seeking Alpha, a Google spokesperson acknowledged that the company “constantly researches and experiments with new innovations.” The representative emphasized Google’s “full stack approach” involving integrated co-design of both hardware and software components.
Earlier this year in April, Google introduced its eighth-generation TPU lineup—including the TPU 8t designed for training and the TPU 8i optimized for inference—during a cloud computing conference held in Las Vegas.
Massive Cloud Backlog Supports Investor Optimism
Apart from chip development news, Google Cloud’s substantial Q1 2026 backlog totaling approximately $462 billion has sustained positive institutional sentiment. This figure represents nearly a 100% increase from the previous quarter, maintaining buyer interest even amid broader market concerns about AI infrastructure spending that have pressured semiconductor stocks.
The wider market context provided modest support on Monday. The Nasdaq Composite climbed 0.5% while the S&P 500 rose 0.3%, partially recovering from last week’s steep decline in semiconductor stocks that pushed the Philadelphia Semiconductor Index down over 20% from recent highs.
The Dow Jones Industrial Average declined 0.3%, reflecting a rotation out of cyclical sectors and into large-cap technology names.
GOOGL shares outpaced other technology sector constituents during Monday’s session, recovering losses incurred during the previous week’s broad-based tech selloff.
Analyst consensus entering Wednesday’s earnings release anticipates robust results across Search advertising, YouTube, and Google Cloud segments.
