Alphabet just got a major Wall Street upgrade | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Alphabet does not need another “it’s cheap” argument; instead, Raymond James is putting its money on something more powerful, which is a revision cycle.

Alphabet (GOOG, GOOGL) is now upped to a strong buy with a price target of $400, according to Barron’s. Raymond James is making the argument that Google’s AI stack is “shifting to high gear,” possibly driving “material upward revisions” to medium-term estimates.

For me, the call is a meaningful one, especially in megacap land, because the next rally for such a large tech giant will come from revisions of estimates, not just AI vibes.

Google’s “AI stack” is getting real.

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Alphabet quick facts at a glance

GOOGL price:$327.93
Market cap: about $2.94T
P/E: about 23.6x
Next earnings date:Feb. 4, 2026 (after the close)
Wall Street “average” target: About $328.79, which shows the aggressive nature of the $400 call

What I find intriguing is that GOOGL stock is not priced like a megacap with valuation issues. Instead, because it’s priced like a stable winner, the next move higher usually requires a catalyst that changes consensus estimates.

This is what the Raymond James note is all about.

Why the $400 Alphabet target is a statement

Raymond James believes that AI narratives and estimate changes, not a mean-reversion trade, are likely to lead the way in the mega-cap internet in 2026.

After several years of covering Alphabet, I believe the current framing is the correct one, at least for the current moment. GOOGL investors are tired of “AI will matter someday” stories; they want results on AI, and they want them now.

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In my humble opinion, GOOGL stockholders want AI to color the numbers in earnings reports, forward guidance, and segment mix.

Raymond James pegs the $400 target to a 29x multiple on 2027 earnings and believes the high value it commands at the moment is justified if AI superpowers result broadly in Cloud and Search.

The most crucial factor, in my opinion, is the level of precision. The market will examine a 2027 framework quarter by quarter if an analyst is ready to put it on the table.

Cloud is the engine room, and Beck is modeling a bigger one

Raymond James models Google Cloud Platform growth of 44% in 2026 and 36% in 2027; both numbers are above Street estimates.

The note’s optimism is based on infrastructure and platform services plus scaling of TPUs, GPUs, Gemini API, and Vertex AI.

Here is what I think makes this section “real.” Beck isn’t just claiming that Cloud increases; he’s putting the drivers into buckets that can be followed. These include the following.

$25B annualized revenue from TPUs
$20B from GPUs
$10B from Gemini API
$2.5B from Vertex AI

What I learned is that Cloud is no longer merely a narrative about margins. It is becoming an AI platform tale, and that type of change may last across revisions.

The sleeper stat that says AI is already in production

This is where I think Alphabet has an edge that isn’t priced high enough.

When a business can point to scale usage, it stops sounding like a demo.

The “production signal” in this story means that Alphabet is trying to show that its AI stack is already working in the real world and reaching real people.

I think this is exactly what Wall Street wants to hear before it pays a lot more.

Search is not dead, but monetization is the whole ballgame

So far, so good; everything seems fine and dandy. But bears will ask a question that is haunting Reddit forums and online social media pages: If AI answers reduce clicks, will ads suffer?

There has been no way around this issue. Until now, that is.

Raymond James believes Search is not dead. In fact, it forecasts Search growth of 13% in 2026 and 13% in 2027, arguing AI Overviews, AI Mode, and Gemini can help balance any issues that are coming up with core search.

I think the key question is not whether users like AI answers; they will. It is whether Google can convert that behavior into anything that sounds commercial, and whether advertisers will pay for it.

The first clue will likely emerge in the comments, not just the headline Search line. When management speaks about conversion quality, CPC dynamics, and advertiser results, this story becomes worth investing in.

The money tells are capex and margins

I pay the closest attention to this part, since it’s when “AI stack” ceases being a story and starts being a budget.

Alphabet is spending a lot of money, and its 2025 capital expenditures are in the range of $91B to $93B. Buildout comments also show that it is eager to spend more when demand rises, while still keeping profits safe.

I believe Alphabet is different from smaller AI companies because it can invest a lot of money and still print serious margins. That combination is uncommon, which is why huge organizations continue to be committed, even when public opinion changes.

Alphabet Q4 results: Feb. 4 is the scoreboard

Alphabet reports fourth-quarter and full-year 2025results on Feb. 4, and here is what I will be listening for, in plain language.

Do we hear terminology that backs up the idea of a Cloud re-acceleration?
Are we sure that Search monetization is still working with AI features?
Do we receive capex guidance that tells us to build now and make money later, without causing a concern about margins?

In my perspective, the stock doesn’t require a big quarter to perform well. It has to take a stance that helps the market feel safe about upping the projections for 2026 and 2027.