TD Cowen on Friday increased its price target for Alphabet (NASDAQ:GOOG) to $365.00, up from $355.00, while retaining a Buy recommendation on the shares. The new target remains below the analyst high of $400. InvestingPro data referenced by the firm shows Alphabet trading at a price-to-earnings ratio of 30.8 and a favorable PEG ratio of 0.94.
The upgrade reflects a performance mix in which Alphabet's Cloud business exceeded expectations and helped offset a slight revenue miss at YouTube. On aggregate, reported revenue was 2.3% above consensus estimates. TD Cowen also noted operating income came in 3.8% higher than the firm's expectations when excluding Waymo stock-based compensation.
For the period reported, Alphabet disclosed total revenue of $402.84 billion, representing 15.09% year-over-year growth. Management emphasized artificial intelligence initiatives as primary growth drivers across both Cloud and Search. The company reported that its Gemini AI product has reached 750 million monthly active users and that an AI Mode is contributing to higher Search engagement.
InvestingPro classifies Alphabet as a "prominent player in the Interactive Media & Services industry" and assigns the company an overall financial health rating of "GREAT." Those metrics were cited alongside the fundamental results in TD Cowen's reassessment.
Capital allocation assumptions changed materially. Alphabet's management provided capital expenditure guidance for 2026 of $175-$185 billion, which is substantially higher than TD Cowen's prior estimate of roughly $125 billion. In response, TD Cowen raised its long-term estimates for Alphabet, including the updated capex outlook, and factored those revisions into the new price target while keeping the Buy rating intact.
The company's fourth-quarter 2025 results were highlighted as particularly strong. Alphabet reported earnings per share of $2.82 versus an expected $2.64, a 6.82% beat. Quarterly revenue was $113.8 billion, above the $111.13 billion that analysts had projected. These figures were cited in support of the positive reassessment by TD Cowen.
On the autonomous vehicle front, Waymo announced a return to Boston and an expansion to Sacramento as part of its operational footprint. In Boston, Waymo intends to apply lessons from prior testing to address the city's driving environment. The company is also working to validate its sixth-generation Waymo Driver in snowy cities to pursue fully autonomous operations during winter months. These updates underscore ongoing development and geographic expansion within Waymo's program.
TD Cowen's revised price target, the maintained Buy rating, and the firm's higher long-term estimates reflect a combination of stronger-than-expected Cloud results, modest weakness in YouTube revenue, elevated capital expenditure guidance, and management's emphasis on AI-driven engagement across key products.