--- title: "Alphabet Is Poised to Be an AI Winner, Analyst Says" type: "News" locale: "en" url: "https://longbridge.com/en/news/295558399.md" description: "BNP Paribas maintains an Outperform rating on Alphabet with a $420 price target, citing strong long-term AI and Cloud growth potential. Despite a recent stock dip, the analyst views Alphabet as well-positioned to benefit from AI demand in advertising and cloud services. The forecast is based on a 30x 2027 P/E multiple, suggesting current valuations underestimate the company's infrastructure and market strength." datetime: "2026-08-11T15:45:40.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295558399.md) - [en](https://longbridge.com/en/news/295558399.md) - [zh-HK](https://longbridge.com/zh-HK/news/295558399.md) --- # Alphabet Is Poised to Be an AI Winner, Analyst Says **Alphabet Inc.** (NASDAQ:GOOG) (NASDAQ:GOOGL) stock traded lower by almost 2% on Tuesday as mega-cap technology stocks weakened. The Nasdaq fell 0.13%, while the S&P 500 slipped 0.08%. Alphabet is underperforming the broader Communication Services sector. The sector gained 0.18% on Tuesday, even as Alphabet shares fell. Market breadth remained slightly positive. Six of the 11 major sectors traded higher, with an advance-decline ratio of 1.2. However, investors favored more defensive and cyclical areas of the market. Energy led with a 1.23% gain, while Industrials rose 0.65%. ## BNP Paribas Keeps Outperform Rating Wall Street remains bullish on Alphabet’s longer-term prospects, particularly as artificial intelligence drives demand across its advertising and cloud businesses. **BNP Paribas** analyst **Nick Jones** said Alphabet remains well positioned to benefit from AI demand, supported by healthy advertising trends, rising Cloud demand and its vertically integrated technology stack. “We continue to view Alphabet as well positioned to be an AI winner,” the analyst said. Jones maintained an Outperform rating on Alphabet and set a $420 price forecast, based on a 30-times 2027 estimated price-to-earnings multiple. The analyst said Alphabet’s current 2027 estimated P/E of about 23 times underestimates the company’s strength across infrastructure, models, distribution, consumer adoption, enterprise use and digital advertising. ## AI And Cloud Demand Support Investment He said Alphabet’s AI and Cloud demand continues to support elevated investment and a broader strategy. Alphabet reiterated plans for a significant increase in fiscal 2027 capital spending, while depreciation may become uneven as new data-center capacity comes online. Jones said Alphabet expects some TPU sales this year, with most of those sales coming in 2027. The analyst said TPUs can open a new market and expand Alphabet’s total addressable market. ## Advertising Trends Remain Healthy He said underlying advertising trends remain strong and continue to benefit from AI. Alphabet said AI is improving targeting, relevance and measurement, while also helping small and medium-sized businesses optimize creative. In Search, AI allows users to ask more complex questions, giving Alphabet’s ad systems more opportunities to understand intent and tailor ads over time. ## Margins Face Depreciation Pressure Jones said several one-time items affected second-quarter margins, including a $1.5 billion legal fine in Google Services general and administrative expenses and a digital-services tax reversal benefit. The analyst said rising depreciation from new capacity coming online will pressure margins, even as Cloud backlog, enterprise AI adoption and advertising demand strengthen Alphabet’s longer-term outlook. The stock carries a Buy rating with an average price forecast of $418.60. Recent analyst moves include: **JPMorgan** has an Overweight rating and recently lowered its price forecast to $420. **TD Cowen** maintained a Buy rating and a $475 price forecast. **Oppenheimer** lowered its price forecast to $400 while maintaining an Outperform rating. ## Top ETF Exposure - **State Street Communication Services Select Sector SPDR ETF** (NYSE:XLC): 8.89% Weight - **Motley Fool 100 Index ETF** (BATS:TMFC): 8.64% Weight - **Principal Focused Blue Chip ETF** (NASDAQ:BCHP): 9.35% Weight **Significance:** Because GOOG carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock. ## Price Action **GOOG Stock Price Activity:** Alphabet shares were down 1.69% at $349.82 at the time of publication on Tuesday, according to Benzinga Pro data. _Photo via Shutterstock_ **Read Next:** - Amazon Stock Gains Fuel Uptrend: Wall Street Focuses on Massive $496 Billion AWS Order Backlog - Microsoft Stock Surge: Analyst Highlights Expanding Cloud Footprint and OpenAI Momentum - Apple Drops As Investors Watch Margins, iPhone Demand ### Related Stocks - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GGLS.US](https://longbridge.com/en/quote/GGLS.US.md) - [GOU.US](https://longbridge.com/en/quote/GOU.US.md) - [GOOW.US](https://longbridge.com/en/quote/GOOW.US.md) - [GGLL.US](https://longbridge.com/en/quote/GGLL.US.md) - [GOOY.US](https://longbridge.com/en/quote/GOOY.US.md) - [GOOX.US](https://longbridge.com/en/quote/GOOX.US.md) - [GOOP.US](https://longbridge.com/en/quote/GOOP.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [.IXIC.US](https://longbridge.com/en/quote/.IXIC.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [JPM.US](https://longbridge.com/en/quote/JPM.US.md) - [TD.US](https://longbridge.com/en/quote/TD.US.md) - [OPY.US](https://longbridge.com/en/quote/OPY.US.md) - [XLC.US](https://longbridge.com/en/quote/XLC.US.md) - [TMFC.US](https://longbridge.com/en/quote/TMFC.US.md) - [BCHP.US](https://longbridge.com/en/quote/BCHP.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [JPM-M.US](https://longbridge.com/en/quote/JPM-M.US.md) - [JPM-C.US](https://longbridge.com/en/quote/JPM-C.US.md) - [JPM-D.US](https://longbridge.com/en/quote/JPM-D.US.md) - [JPM-L.US](https://longbridge.com/en/quote/JPM-L.US.md) - [8634.JP](https://longbridge.com/en/quote/8634.JP.md) - [JPM-K.US](https://longbridge.com/en/quote/JPM-K.US.md) - [JPM-J.US](https://longbridge.com/en/quote/JPM-J.US.md) ## Related News & Research - [This Is What Needs to Change for Meta Stock, Says Investor](https://longbridge.com/en/news/295418350.md) - [Ryanair signs five-year Google Cloud deal, expands use of AI in airline operations](https://longbridge.com/en/news/295588511.md) - [Avity Investment Management Inc. 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