Overview
Piper Sandler increased its price target for Alphabet (NASDAQ: GOOGL) to $395.00 from $365.00 and kept an Overweight recommendation after the company reported fourth-quarter 2025 results. The research team described the quarter as "impressive," noting that total revenue growth accelerated to 18%, ahead of the firm's 15.5% expectation, and that EBITDA finished roughly 2% above forecasted levels.
Quarterly performance by business
Alphabet’s Search and Cloud units both showed acceleration in the period, though YouTube’s growth rate decelerated notably. Management highlighted a meaningful expansion in Cloud backlog, which rose to $240 billion from $155 billion in the prior quarter, a jump that the research firm sees as a signal of strong future revenue potential.
The company also posted what was described in company commentary as a 2% revenue upside for the quarter. Search revenue grew by 16% year-over-year on an ex-foreign-exchange basis, while Google Cloud revenue surged 48% year-over-year, reflecting the sizable uplift in the cloud business.
Capital spending outlook and cash flow implications
Alphabet management outlined a substantially higher capital expenditure plan for 2026, projecting CAPEX of approximately $180 billion at the midpoint. That figure is materially above Piper Sandler’s prior CAPEX estimate of about $110 billion. The research firm noted that the raised capital spending outlook will place pressure on free cash flow, prompting an upward revision to the firm’s own estimates, particularly around capital deployment.
Despite the prospect of increased cash outflows tied to heightened CAPEX, Piper Sandler characterized the quarterly results as "strong across the board" and moved to a higher price target in response to the better-than-expected operational performance and the revised modeling assumptions.
Other analyst moves
Following Alphabet’s fourth-quarter announcement, several other brokerages also adjusted guidance and targets. BMO Capital raised its target to $400, JPMorgan increased its target to $395, DA Davidson set a $310 target, Cantor Fitzgerald reiterated an Overweight rating with a $370 target, and Stifel moved its target to $395. These actions reflect broad recognition across the sell side of the company’s robust Search and Cloud results and the increased Cloud backlog.
Bottom line
Piper Sandler’s raise to a $395 price target rests on revenue growth that outpaced expectations and modest EBITDA upside, tempered by management’s forecast of much higher 2026 capital expenditures that will weigh on free cash flow. The market response among other analysts has been to lift price targets or reaffirm positive stances, citing the same core drivers: accelerating Search and Cloud growth and a materially larger cloud backlog.