Alphabet’s Cloud Revenue Surge Fuels Stock Rally
Alphabet (GOOGL) shares surged 4% Friday, recovering from early February losses as Google Cloud's revenue potential captivated investors. TD Cowen's $365 price target implies 19% upside, with AI-driven cloud expenditures projected to generate $19B-$23B by 2026-2027.
The bullish case hinges on Waymo's 1.26 million autonomous trips—a tangible milestone for a subsidiary often viewed as moonshot R&D. This comes as tech stocks collectively shed $1.4T in market cap, making Alphabet's resilience notable.
Capital expenditures are being funneled into generative AI infrastructure, expected to yield an additional $5B-$6B in ad revenue. The market appears to be pricing in cloud's growing contribution to what remains an advertising-led business.