Alphabet: Strong AI-Driven Growth, Cloud Momentum, and Attractive Valuation Support Reiterated Buy and $370 Target

Analyst Justin Post from Bank of America Securities reiterated a Buy rating on Alphabet Class A and keeping the price target at $370.00.

Justin Post has given his Buy rating due to a combination of factors tied to Alphabet’s strong operating momentum and AI-driven growth prospects. He highlights that both Search and Cloud revenues substantially exceeded market expectations in the latest quarter, with particularly robust growth in Cloud and record levels of search activity. While reported operating margins were slightly below consensus due to a one‑time Waymo stock-based compensation charge, underlying profitability remained solid, and earnings per share still came in ahead of forecasts thanks to stronger-than-expected other income. He also notes that the firm is raising its longer-term revenue and earnings estimates, reflecting confidence that current AI initiatives will translate into sustained financial upside.
Post sees Alphabet’s Gemini AI platform as a central driver of future value, accelerating search usage, deepening user engagement through more complex queries, and opening new monetization avenues such as AI Overviews, agentic capabilities, and advertising within the Gemini app. In Cloud, he views Gemini and Google’s TPU infrastructure as key competitive advantages that are already translating into faster revenue growth, an expanding backlog, and improving margins, with elevated capital expenditures expected to deliver high returns as additional capacity supports further demand. He believes the current valuation multiple, especially for the core services business on a sum-of-the-parts basis, remains attractive relative to Alphabet’s growth and profitability profile. Upcoming AI and Cloud product catalysts, including consumer agent launches and the Cloud Next conference, reinforce his conviction in the company’s trajectory and underpin his reiterated Buy recommendation and $370 price objective.

In another report released today, BMO Capital also reiterated a Buy rating on the stock with a $400.00 price target.