Analysts revamp Alphabet stock price target before key earnings | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Google is scaling up its AI infrastructure with a $25 billion investment in electricity, a move that’s drawing interest from investors ahead of earnings.

The tech giant plans to build out data centers and AI infrastructure across the PJM Interconnection, the largest power grid in the United States.

Google also signed a deal with Brookfield Asset Management (BAM) to purchase 3,000 megawatts of hydroelectric power across the U.S., according to an announcement on July 15.

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As AI systems grow more powerful, demand for energy and computing power soars. Hyperscalers like Google need steady, low-carbon power, and they are planning to build the infrastructure to meet that demand.

Microsoft made a similar move in September 2024, signing a 20-year power agreement with Constellation Energy (CEG) to restart the Three Mile Island Unit 1 plant. That agreement will add 835 megawatts of carbon-free power to the PJM grid and help supply Microsoft’s data centers.

Google’s push into hydroelectric power follows the same logic, ensuring enough energy to meet AI’s rising demands to stay competitive in the cloud race.

Alphabet stock is down 3% year-to-date.

Image source&colon; Radecka/NurPhoto via Getty Images

Google ramps up AI investment

In the first quarter of 2025, Google’s parent Alphabet (GOOGL) reported capital expenditure of $17.2 billion, with most of it going into technical infrastructures, Alphabet’s CFO Anat Ashkenazi said during the April earnings call.

Ashkenazi said the largest component was investment in servers, followed by data centers, to support the growth of business across Google Services, Google Cloud, and Google DeepMind.

She also confirmed that Alphabet is still committed to investing $75 billion this year in AI, regardless of any “macroeconomic changes” like tariffs.

“We do see a tremendous opportunity ahead of us across the organization,” she said.

On April 24, Alphabet posted stronger-than-expected results for the first quarter, easing concerns about slowing growth in the face of rising AI competition.

The company reported earnings of $2.81 per share, well above the $2.01 that analysts had expected. Revenue was $90.23 billion, an increase of 12% from a year earlier. This beat Wall Street’s forecast of $89.12 billion and a 10% growth rate.

Search and advertising, Alphabet’s core businesses, continued to perform well even as competition in AI ramped up. The company is set to report its second-quarter results on July 23.

Analysts raise Alphabet stock price targets on AI and ad revenue optimism

Several Wall Street analysts raised their price targets for Alphabet before its earnings release next week.

KeyBanc raised its price target on Alphabet to $215 from $195 and reiterated an overweight rating, thefly.com reported on July 17.

The firm expects a solid Q2 with revenue of $94.6 billion driven by Search, YouTube, and Cloud. It also anticipates positive commentary on AI Mode, Waymo, and expense efficiencies.

BMO Capital boosted its target to $208 from $200, citing growing confidence in Google’s ability to drive ad revenue through AI.

The firm sees more spending from both existing advertisers and new small to mid-size businesses, and has lifted its forecast for Search growth to 10% for Q2.

BMO also reintroduced Alphabet as a Top Pick, noting its shares still trade below the five-year average earnings multiple, which means the stock is a good value because it’s trading at a lower price.

Cantor Fitzgerald also raised its price target to $196 from $171 while keeping a neutral rating.

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The firm expects Alphabet’s second-quarter results to beat expectations, driven by strong performance in core Search and YouTube. However, Cantor Fitzgerald is waiting for more clarity on regulatory challenges before upgrading the stock.

Alphabet stock closed at $183.58 on July 17. The stock is down 3% year-to-date.