Roth raises price target on Alphabet

Roth Capital analyst Rohit Kulkarni raised his target on Alphabet (Alphabet Stock Quote, Chart, News, Analysts, Financials NYSE:GOOGL) to $435.00 from $395.00, maintaining a “Buy” rating after what he called a strong first-quarter 2026 beat driven by Search, Cloud and subscriptions.

In his April 30 sales analysis Kulkarni said Google Cloud revenue rose 63% year-over-year to $20-billion, while backlog nearly doubled to more than $460-billion, giving the company strong forward visibility. Search revenue grew 19%, supported by all-time-high query volumes and adoption of AI Overviews and AI Mode.

“We think the adoption of Gemini models and related tools imply GOOGL can deploy multiple N-T user and advertiser-facing products to translate AI-led growth across each owned surface,” Kulkarni said.

Alphabet raised its 2026 capex outlook to $180-billion to $190-billion from $175-billion to $185-billion, with further increases expected in 2027 as it works to meet AI demand. Kulkarni said the spending is elevated but supported by demand signals, noting management said Cloud growth could have been higher without compute constraints.

“While this level of spend will pressure near-term margins via depreciation and operating costs, we view it as necessary to capture a rapidly expanding AI TAM,” he said.

Kulkarni said YouTube ad revenue grew 11%, with stable trends across ads, subscriptions, Shorts and connected TV. He also said operating margins have held up so far, helped by scale, Cloud and Search growth, cost discipline and internal use of AI.

He expects Alphabet to generate Adjusted EBITDA of $201.6-billion on revenue of $492.0-billion in fiscal 2026, improving to $251.4-billion on revenue of $587.4-billion in fiscal 2027.

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