Wells Fargo upgrades Alphabet stock rating on compute capacity expansion
#Wells Fargo#Alphabet#GOOGL#Compute capacity#Google Cloud#Gemini#Stock upgrade#PEG ratio
📌 Key Takeaways
Wells Fargo upgraded Alphabet to Overweight with a $387 price target
Alphabet plans to expand compute capacity to 35 gigawatts by 2028
Google Cloud revenue estimates raised to 60% YoY growth for 2026
Gemini consumer subscription expected to reach $12 billion ARR by end of 2027
Alphabet's valuation remains attractive with a PEG ratio of 0.84
📖 Full Retelling
Wells Fargo upgraded Alphabet (NASDAQ:GOOGL) to Overweight from Equal Weight and raised its price target to $387 from $354 on February 23, 2026, citing the company's plans to expand compute capacity to 35 gigawatts by 2028 from 15 gigawatts at year-end 2025, which extends Alphabet's capacity lead relative to other hyperscaler companies. The financial institution significantly increased its Google Cloud revenue estimates to 60% year-over-year growth for 2026, which is 11% above consensus, while projecting 2027 and 2028 growth of 42% and 28% respectively, both exceeding market expectations. Wells Fargo also incorporated into its projections a Gemini consumer subscription revenue business that it expects will reach $12 billion in annual recurring revenue by the end of 2027 from $4 billion exiting 2025, with potential upside from the Apple Siri relationship likely contributing in 2027 or later. The firm's Cloud operating income estimates for fiscal years 2026 and 2027 are now 10% to 15% ahead of Street estimates, and the company's valuation remains attractive with a PEG ratio of 0.84, suggesting the stock trades at a discount to its growth rate. In other recent developments, Google has unveiled Gemini 3.1 Pro, an upgraded AI model that enhances reasoning capabilities for complex problem-solving, while Alphabet's Waymo faced a setback in its expansion plans as New York Governor Kathy Hochul withdrew a proposal allowing commercial robotaxi services outside New York City.
American multinational banking and financial services company
Wells Fargo & Company is an American multinational financial services company. The company operates in 35 countries and serves more than 70 million customers worldwide. It is a systemically important financial institution according to the Financial Stability Board, and is considered one of the "Big ...
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Google Cloud Platform (GCP) is a suite of cloud computing services offered by Google that provides a series of modular cloud services including computing, data storage, data analytics, and machine learning, alongside a set of management tools. It runs on the same infrastructure that Google uses inte...
Alphabet Inc. is an American multinational technology conglomerate holding company headquartered in Mountain View, California. It was created through a restructuring of Google on October 2, 2015, and became the parent holding company of Google and several former Google subsidiaries.
Wells Fargo's upgrade signals strong confidence in Alphabet's future growth driven by AI infrastructure expansion. This reflects broader positive analyst sentiment and suggests Alphabet is well-positioned to maintain its leadership in the competitive cloud computing market. The projected revenue growth significantly above consensus estimates highlights the potential for substantial shareholder value creation.
Context & Background
Alphabet plans to expand compute capacity to 35 gigawatts by 2028 from 15 gigawatts at end of 2025
Wells Fargo raised its price target for Alphabet (GOOGL) to $387 from $354
InvestingPro data shows 22 analysts have revised their earnings upwards for Alphabet
What Happens Next
Alphabet will focus on executing its compute capacity expansion plan to meet the projected cloud revenue growth. Investors will monitor the rollout of Gemini consumer subscriptions and potential revenue contributions from the Apple Siri partnership expected in 2027 or later. Market attention will remain on whether Alphabet can meet or exceed the elevated growth forecasts.
Frequently Asked Questions
Why did Wells Fargo upgrade Alphabet stock?
Wells Fargo upgraded Alphabet due to its plan to significantly expand compute capacity, which extends its lead over other hyperscaler companies and supports strong cloud revenue growth projections.
What is the new price target for Alphabet stock?
Wells Fargo raised its price target for Alphabet (GOOGL) to $387 from $354.
How does Alphabet's valuation look after the upgrade?
Alphabet's valuation remains attractive with a PEG ratio of 0.84, suggesting the stock trades at a discount to its growth rate.
Original Source
try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Trump’s 15% global tariff; Waller to speak; oil drops - what’s moving markets Can gold rise to new highs above $5,600 in 2026? Bitcoin slips after earlier gains amid tariff volatility Bull vs. bear argument on Friday’s Supreme Court tariff ruling (South Africa Philippines Nigeria) Wells Fargo upgrades Alphabet stock rating on compute capacity expansion By Investing.com Analyst Ratings Published 02/23/2026, 04:38 AM Wells Fargo upgrades Alphabet stock rating on compute capacity expansion 0 GOOGL 4.01% Investing.com - Wells Fargo upgraded Alphabet (NASDAQ:GOOGL) to Overweight from Equal Weight and raised its price target to $387 from $354. The upgrade aligns with broader analyst sentiment, as InvestingPro data shows 22 analysts have revised their earnings upwards for the upcoming period. The firm cited the company’s plan to expand compute capacity to 35 gigawatts by 2028 from 15 gigawatts at year-end 2025. Wells Fargo said this expansion extends Alphabet’s capacity lead relative to other hyperscaler companies. Wells Fargo raised its Google Cloud revenue estimates to 60% year-over-year growth for 2026, which is 11% above consensus. The firm projects 2027 and 2028 growth of 42% and 28% respectively, which are 16% and 12% above consensus estimates. The firm estimates Google Cloud will expand capacity to 16.9 gigawatts in 2028 from 7.6 gigawatts in 2025. Wells Fargo’s Cloud operating income estimates for fiscal years 2026 and 2027 are now 10% to 15% ahead of Street estimates. Wells Fargo incorporated into its projections a Gemini consumer subscription revenue business that it expects will reach $12 billion in annual recurring revenue by the end of 2027 from $4 billion exiting 2025. The firm also identified potential upside from the Apple Siri relationship as a likely contributor in 2027 or later.The company’s valuation remains attractive with a PEG ratio of 0.84, suggesting the stock trades at a discount to its gro...
