Key Takeaways
- Alphabet shares have surged 23% year-to-date in 2026 and climbed 135% over the trailing 12 months
- First-quarter earnings per share reached $5.11, dramatically exceeding the $2.68 Wall Street forecast; total revenue climbed to $109.9B
- The Google Cloud division expanded approximately 63% with revenue commitments nearly doubling to $468B
- J.P. Morgan lifted its target price to $460 while maintaining an Overweight stance
- Among all analysts tracking GOOGL, 86% have assigned Buy ratings
Alphabet shares dipped 0.9% to approximately $382.20 during Monday’s session, yet this modest decline masks what proved to be among the most impressive quarterly performances witnessed on Wall Street recently.
First-quarter earnings per share registered at $5.11, significantly surpassing the analyst consensus of $2.68 by more than double. Total revenue reached $109.9B, representing a 21.8% year-over-year increase and beating the projected $106.96B.
The core financial metrics delivered undeniable strength.
Google Cloud emerged as the quarter’s breakout performer. This business unit experienced approximately 63% growth, generating roughly $20B in revenue. However, the division’s impact on Alphabet’s committed revenue pipeline proved even more remarkable.
The company’s total committed revenue backlog nearly doubled quarter-over-quarter, climbing to $468B in Q1 from $243B previously. Cloud services account for 99% of this figure, with expectations that over half will materialize as actual revenue within the next 24 months.
Doug Anmuth, analyst at J.P. Morgan, characterized the backlog expansion as “the single-most impressive metric this earnings season thus far.”
The investment bank maintained its Overweight designation while elevating its price objective to $460 from the previous $395. Anmuth emphasized that GOOGL remains the firm’s “top overall pick” and projected continued upward momentum driven by earnings estimate revisions and valuation multiple expansion.
Following the quarterly disclosure, over 40 Wall Street analysts increased their price projections. Among the 74 research firms monitored by FactSet, 86% maintain Buy recommendations.
Core Search Business Accelerates
Primary search revenue expanded 19% year-over-year during Q1, marking the fourth straight quarter of accelerating growth momentum. J.P. Morgan interpreted this trend as validation of Alphabet’s position that artificial intelligence enhances rather than threatens its search business.
Additional firms joining the optimistic outlook include TD Cowen, Scotiabank, Raymond James, and Piper Sandler, each raising their targets post-earnings.
Skepticism persists among some analysts. D.A. Davidson maintained a Neutral stance, increasing its target to $375 from $310 while cautioning that the strong performance is “well reflected in the current valuation.”
Infrastructure Investment Remains Critical Focus
Alphabet projected 2026 capital expenditures between $185B and $190B, with additional increases anticipated for 2027. J.P. Morgan highlighted that elevated spending levels will be essential to fulfill the massive cloud backlog, and investors will closely monitor conversion rates from committed to recognized revenue.
Hardware components are gaining importance as well. D.A. Davidson observed that TPU chip sales to cloud customers have significantly contributed to backlog expansion, though profitability dynamics of these arrangements remain uncertain.
The company also announced a quarterly dividend increase to $0.22 from $0.21, with payment scheduled for June 15.
The stock’s 52-week peak stands at $383.39, positioning it within striking distance of surpassing Nvidia as the world’s most valuable enterprise, currently holding a market capitalization of $4.64 trillion.
B. Metzler seel. Sohn & Co. AG expanded its Alphabet position by 16.5% during Q4 to 322,820 shares valued at approximately $101.3M, establishing it as the firm’s 22nd-largest investment.
