Citizens raised its price target on Alphabet (NASDAQ: GOOGL) to $385 from $340 while maintaining a Market Outperform rating, citing improving search fundamentals and multiple medium-term growth drivers.

The firm said Alphabet's shares had more than doubled from their May lows, prompting a reassessment of estimates and valuation assumptions that were increasingly driven by a reacceleration in search. Citizens said it believed Google could further accelerate search revenue in the fourth quarter of fiscal 2025, which it viewed as the key near-term question for investors.

The analyst highlighted several medium-term catalysts, including Gemini, Google Cloud, Waymo, and custom TPUs, which were expected to support a broader inflection in results during 2026 and 2027. On search specifically, Citizens said query growth appeared to be accelerating as AI Overviews, AI Mode, and Gemini drove higher engagement. In addition, Smart Bidding Exploration was expanding Google's advertising load by connecting advertisers to user intent rather than keywords, increasing the proportion of queries linked to ads.

Citizens noted that the third quarter marked the first full period with Smart Bidding Exploration in place and said it expected the fourth quarter to benefit similarly, supported by a stable macro backdrop for holiday advertising spend. Based on these factors, the firm increased its price target and reiterated its Market Outperform view.