Two weeks ago, I wrote a piece asking readers a blunt question: do you own enough Google? The stock was sitting at $332.91 when I drafted it. I’ve held it for almost 15 years, so I will admit my bias up front. I still thought the answer for most readers was no.
Last night’s earnings hardened my conviction.
What I argued two weeks ago
The thesis on Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) was simple. You are buying several Fortune 500-scale businesses priced as one ad stock: Search, Cloud, YouTube, Waymo ($16B funding round in February 2026), DeepMind, Android, and Maps. I leaned hard on the AI infrastructure angle, including the long-term TPU and networking supply agreement with Broadcom through 2031. My price target was $393.06 with a BUY at 90% confidence.
From the April 15 to wherever Google closes today, you’re looking at over 10% gains. Not bad. There’s much more to be had from here, is my bet.
Last night’s earnings report
Alphabet reported EPS of $5.11 versus the $2.63 consensus, a 94.1% beat, on revenue of $109.896 billion, up 22% year over year. Google Cloud was the headliner: $20.028 billion in revenue, up 63%, with backlog nearly doubling quarter on quarter to over $460 billion. Operating margin expanded 2 points to 36.1%.
2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business. Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion.
—Sundar Pichai, Q1 2026 earnings release
Then the kicker. Google announced it will sell TPU chips to select customers, a direct shot at Nvidia and exactly the AI-infrastructure validation I laid out two weeks ago. Shares jumped from $347.84 at the filing to $371.36 within an hour, a 7% move.
Wall Street repriced the stock overnight
The analyst desks did not wait:
- Goldman Sachs: $400 to $450
- Cantor Fitzgerald: $395 to $465
- Citigroup: $405 to $447
- HSBC: $385 to $435
- BMO Capital: $410 to $435
- KeyBanc: $380 to $425
- Stifel: $387 to $420
- Evercore ISI: $400 to $420
- Rothschild & Co Redburn: $390 to $430
All Buy/Outperform/Overweight, maintained.
The risks I still respect
I called these out originally and they are still real. Capex more than doubled year over year to $35.67 billion, pushing free cash flow down 47%. The 2026 capex guide of $175B to $185B is execution risk in plain sight. Antitrust pressure has not gone anywhere either.
The answer is the same
Two weeks ago, I thought you probably did not own enough Google. After a 94% EPS beat, 63% Cloud growth, the TPU commercialization announcement, and ten major analysts resetting targets higher this morning, the answer has not changed. You still do not own enough Alphabet. I am not selling a share. Here’s to another 15 years.
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