Alphabet Has 1 Problem Holding Back Growth, But Analysts Still See Upside for GOOGL Stock

Alphabet Has 1 Problem Holding Back Growth, But Analysts Still See Upside for GOOGL Stock Jabran Kundi Mon, July 20, 2026 at 9:31 PM GMT+2 4 min read GOOG Alphabet (GOOG) (GOOGL) just got another vote of confidence ahead of its earnings. BMO Capital analyst Brian Pitz reiterated his "Buy" rating for the firm while raising his price target from $435 to $455. The main driver for the bullish view was Pitz's higher forecast for Google Cloud.

He pointed to the company's expanding capacity and growing backlog of committed cloud deals. That view aligns with what Alphabet management said after its first-quarter release. CEO Sundar Pichai admitted that cloud revenue would have been higher if the company had been able to meet demand.

To close that gap, CFO Anat Ashkenazi raised full-year capital spending guidance to as much as $190 billion and said spending in 2027 would rise significantly again. So the analyst and the company agree on the same point. Cloud demand is strong, and the limit is capacity, not customers.

Pitz also sees Google leading in search with mid-to-high-teens growth. However, the analyst's main concern was Google's Gemini. Reports suggest that Google delayed the launch of Gemini Pro 3.

5 after it fell short of internal benchmarks. That matters more than it might seem. Alphabet is spending close to $190 billion this year, much of it on AI infrastructure.

In April, the CEO said that the company is focused on getting a return on what it spends. A setback on the model side makes that spending harder to justify. The Gemini delay is partly why the stock fell on the same day that BMO Capital raised its price target.

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KeyBanc, Morgan Stanley, and Bank of America Securities have all raised Alphabet's price target ahead of its second-quarter results on July 22. About Alphabet Stock Alphabet is a global technology company built around search, digital advertising, cloud computing, and artificial intelligence. Its product portfolio includes Google Search, YouTube, Android, Chrome, Google Cloud, and Gemini.

Founded in 1998 as Google and restructured as Alphabet in 2015, the company is headquartered in Mountain View, California and is led by CEO Sundar Pichai. Story Continues Over the last 12 months, Alphabet's stock has climbed 89. 9%, comfortably outperforming the S&P 500 Index's 18.

4% gain over the same time. Most of that growth came last year, with the stock being up just 12. 25% YTD.

The stock recently slipped 2. 17% in a single session, hit by a wider tech stocks selloff and the Gemini Pro 3. 5 delay.

www. barchart. com What Investors Want To See From Alphabet On July 22 Alphabet reported its first-quarter fiscal 2026 earnings on April 29.

Revenue of $109. 9 billion increased 22% year-over-year (YOY), while the EPS of $5. 11 surged even more significantly by 82%.

This was the eleventh consecutive quarter where the firm recorded double-digit revenue growth. Looking ahead, Alphabet raised its full-year 2026 capital spending guidance to a range of $180 billion to $190 billion, up from $175 billion to $185 billion. Management said spending would rise significantly again in 2027.

The cloud backlog now stands at over $460 billion, almost double the prior quarter. So the company has visibility on revenue well into next year. The CEO said that Google Cloud revenue, which grew 63%, would have been even higher if Alphabet could have met demand.

Management expects to start recognizing revenue from its TPU chip sales later this year. Alphabet's second-quarter earnings will be reported on July 22. Investors will be looking to know the progress on cloud capacity and any updates on 2027 spending.

What Are Analysts Saying About Alphabet Stock? A couple of days prior to BMO Capital's price target raise, Wedbush analyst Ygal Arounian initiated Alphabet's coverage with a "Buy" rating and a steep price target of $671. This was by some distance the highest price set for Alphabet this year.

Bank of America Securities analyst Justin Post also recently raised his price target from $370. 92 to $430. www.

barchart. com www. barchart.

com Based on the 54 Wall Street analysts, Alphabet holds a "Strong Buy" rating with a mean price target of $433. 98, indicating a 23. 2% upside.

Even the lowest price target of $365 remains above the firm's current share price, with no analyst recommending selling the stock. This suggests that the vast majority of analysts remain bullish ahead of the firm's second-quarter release. On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article.

All information and data in this article is solely for informational purposes. This article was originally published on Barchart.