The stock of Google parent company Alphabet (GOOGL) could rise 40% in coming months, according to analysts at U.S. bank Wells Fargo (WFC).
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The bullish call comes after GOOGL stock has declined 11% in the past month. The stock is currently trading at its lowest level since last November. Alphabet’s stock has gotten dinged after a court verdict found the company’s YouTube channel was deliberately designed to be addictive to young people.
Despite the decline, Wells Fargo has raised its price target on GOOGL stock to $397 from $387, which is 40% higher than where the company’s shares currently trade. Wells Fargo also reiterated a Buy-equivalent overweight rating on the Alphabet’s stock.
Reasons to be Bullish on GOOGL Stock
The main reason Wells Fargo is bullish on GOOGL stock is the company’s leading position in the artificial intelligence (AI) race. In a note to clients, Wells Fargo wrote that Alphabet is “leveraging its compute capacity advantage to develop new profit pools.”
Wells Fargo highlighted Alphabet’s licensing of tensor processing unit (TPU) microchips to AI startup company Anthropic, and its March 11 acquisition of cloud security startup Wiz for $32 billion in cash as reasons to be optimistic about the company’s future revenue growth.
Is GOOGL Stock a Buy?
The stock of Alphabet has a consensus Strong Buy rating among 32 Wall Street analysts. That rating is based on 26 Buy and six Hold recommendations issued in the last three months. The average GOOGL price target of $376.57 implies 30% upside from current levels.
