Alphabet’s (GOOGL) Google Cloud is well-positioned for a major growth spurt. At the Goldman Sachs Communacopia + Technology conference today, Google Cloud CEO Thomas Kurian noted that the unit’s $106 billion backlog of non-recognized sales contracts is expanding rapidly. Also, he said the company expects to convert more than 50% of this amount, nearly $58 billion, into revenue by 2027.
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GOOGL stock was up more than 2% on Tuesday’s trading session.
Importantly, he mentioned that this backlog is expanding at a faster pace than Google Cloud’s actual revenue growth. Kurian also disclosed that Google Cloud added 28% new customers in the last quarter.
AI Fuels Google Cloud’s Growth
Google Cloud’s momentum is linked to the AI boom. Kurian shared that nine of the top 10 largest AI labs, including OpenAI and Anthropic, are now Google Cloud customers. Further, he noted that nearly two-thirds of existing customers are already using Google Cloud’s AI tools in a significant way, making it easier and more cost-effective to sell to them.
Kurian emphasized that Google’s long-term investment in AI is a key support factor. “We’ve spent years building advanced AI technology of our own, chips, systems, tools, agents,” he stated.
“We’re not just reselling third-party AI technology. So why we’re winning is because we see this deep product differentiation now being adopted by customers,” he added.
To support cloud infrastructure expansion, Alphabet CEO Sundar Pichai recently announced a $10 billion increase in capital expenditures, bringing the 2025 total to $85 billion. This move reflects Alphabet’s confidence in cloud demand and its commitment to keep up with other top cloud providers.
What Is the Target Price for Google Stock?
On TipRanks, GOOGL stock has received a Strong Buy consensus rating, with 29 Buys and nine Holds assigned in the last three months. The average Alphabet stock price target is $234.35, suggesting a downside risk of 2.2% from the current level.
