Needham: Strategic position and corporate culture boost valuation, raising Google's target price to $210

According to the Zhitong Finance APP, Needham has raised its earnings expectations and target stock price for Google (GOOGL.US), anticipating that its strategic position and corporate culture will drive valuation increases. Analysts led by Laura Martin stated that the corporate culture of this tech giant is a significant factor in value growth, and the company has the largest general artificial intelligence team, with only two members potentially leaving for Meta (META.US). The firm has raised Google's target price from $178 to $210. Needham stated, "We believe this is because Google possesses a corporate culture, resources, data flow, global scale, and financial capital that can retain and motivate the best tech talent teams. This strong tech culture saves money for public shareholders." According to Needham, Google's current strategic position is solid, thanks to its dominance in the digital advertising space, its status as the leading streaming service in the U.S. with YouTube, and generative artificial intelligence (GenAI). They expect its proprietary large language model (LLM) to drive valuation growth in the next 3 to 5 years. The research firm noted that Google is "second to none" in terms of talent and assets before the arrival of the next major thing. They pointed out that Google has benefited from its search engine during the internet wave, from its Android system during the mobile technology wave, and from Google Cloud during the cloud era. Now, it is leading the artificial intelligence race with Gemini. Needham also believes that the value of Google post-split would be higher than the whole, and if the government forces a split, the stock price held by public shareholders would rise. For the full year of 2025, they expect Google's total revenue to reach $387.2 billion (an 11% year-on-year increase, 0.2% higher than their previous forecast); OIBDA to be $173 billion (a 15% year-on-year increase, 1.5% higher than their previous forecast); and earnings per share (EPS) to be $9.64 (a 20% year-on-year increase, 1.6% higher than their previous forecast). For the full year of 2026, Needham expects total revenue to be $429.1 billion (an 11% year-on-year increase, 0.1% higher than their previous forecast); OIBDA to be $195.4 billion (a 13% year-on-year increase, 1% higher than their previous forecast); and EPS to be $10.28 (a 7% year-on-year increase, 0.4% higher than their previous forecast)