Evercore ISI Boosts Price Target for Alphabet (NASDAQ: GOOGL), Citing Overlooked Cloud Potential
- Evercore ISI maintains an "Outperform" rating for Alphabet (NASDAQ: GOOGL), raising its price target to $450 from $420, reflecting strong cloud growth potential.
- Analysts suggest that Alphabet's significant cloud potential is often overlooked, with market focus sometimes skewed towards AI model performance.
- Alphabet is making substantial strategic investments in its cloud business, including a $22 billion chip loan for Crux AI and significant infrastructure build-out.
- These initiatives, including a transition to merchant silicon, are projected to increase Return on Invested Capital (ROIC) to between 25% and 40% and generate $84 billion to $108 billion in new cloud revenue by 2027/28.
On September 16, 2026, analyst firm Evercore ISI maintains its "Outperform" rating for Alphabet (NASDAQ: GOOGL), raising its price target to $450 from $420. This rating was posted when the stock price was $342.87. Alphabet is a technology giant focused on search, advertising, and cloud computing.
The positive rating reflects Alphabet's significant cloud potential, which some analysts believe is overlooked. As highlighted by MarketWatch, investors may be too focused on AI model performance. The real opportunity, according to the report, lies in the company's expanding cloud business.
Alphabet is making substantial investments to support this growth. A group of 10 banks is providing a $22 billion chip loan for Crux AI, a new cloud venture with Blackstone, as highlighted by Bloomberg News. This funding is a clear indicator of its commitment to cloud expansion.
The company is also building out its infrastructure with off-grid data centers and a dark fiber network. This strategy is expected to increase its Return on Invested Capital (ROIC) to between 25% and 40%. ROIC is a metric that shows how efficiently a company uses its capital to generate profits.
Furthermore, Alphabet's transition to merchant silicon, such as its TPU and Axion CPUs, is a key strategy. This move is projected to derisk $205 billion in capital spending and aims to capture between $84 billion and $108 billion in new cloud revenue by 2027/28.
