Will Alphabet beat the street?

In a Jan. 27 earnings preview, Roth Capital Markets analyst Rohit Kulkarni reiterated a “Buy” rating on Alphabet (Alphabet Stock Quote, Chart, News, Analysts, Financials NASDAQ:GOOGL) and raised his 12-month price target to $365 from $310, ahead of the company’s fourth-quarter results due after the market close on Wednesday, Feb. 4.

Kulkarni said he has modestly increased his 2026 assumptions and introduced 2027 estimates, with the higher target based on applying a roughly 27x multiple to 2027 GAAP EPS. He sees several near-term catalysts in the first half of 2026, including TPU-related partnerships, additional Waymo city launches, user and engagement milestones for the Gemini app, and potential updates around Gemini 4.0. He also noted that major global events such as the FIFA World Cup, the Winter Olympics and the U.S. midterm elections could help offset tougher comparables later in 2026.

“For 4Q, we expect a modest beat versus the Street,” Kulkarni said, adding that a positive market reaction is likely if Alphabet delivers revenue above $111-billion and operating income above $33-billion, and guides constructively for the first quarter.

Among key drivers, Kulkarni expects Google Cloud Platform (GCP) growth to re-accelerate in early 2026, with year-over-year growth in the low-30% range in both Q1 and Q2. He said GCP growth above 35% in Q4 would be a clear positive signal around capacity additions, although elevated expectations could temper upside. He also expects Search revenue to exceed $61-billion in the quarter, or about 13% year-over-year growth, noting that a result north of 15% would likely prompt another upward step in valuation.

Looking ahead, Kulkarni highlighted capital intensity as a key debate. He is modelling 2026 capital expenditures of about $126-billion, up roughly $35-billion year over year, above Street estimates near $115-billion, reflecting cloud backlog growth and anticipated TPU demand. He also pointed to Alphabet’s recently announced Universal Commerce Protocol as a potential mitigant to search fragmentation risk, allowing native checkout within AI-driven search experiences.

Kulkarni noted that while mega-cap stocks have generally lagged small caps since early November, Alphabet shares have risen about 18% over that period. Consensus expectations for revenue, EBITDA and EPS for both Q4 2025 and 2026 have moved higher, with stronger upward revisions to profitability than to revenue. Shares are now trading near the upper end of their recent valuation range, around 30x estimated 2027 earnings.

Kulkarni forecasts Alphabet will generate approximately $148.2-million in Adjusted EBITDA on $400.2-billion in revenue in fiscal 2025, improving to about $177.4-million in Adjusted EBITDA on $459.2-billion in revenue in fiscal 2026.

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