Wells Fargo upgraded Alphabet (GOOGL) to Overweight from Equal Weight. The bank raised its price target for the stock to $387 from $354. Shares of the company rose during early trading following the announcement.
The upgrade reflects a strengthened long-term outlook for Alphabet's artificial intelligence infrastructure. Wells Fargo highlighted Google's leadership in compute capacity as a primary competitive advantage.
Analysis suggests Google is expanding data-center power more rapidly than its industry peers. This expansion is expected to drive 60% revenue growth for the Google Cloud division in 2026.
Wells Fargo also identified significant growth potential in Google's Gemini AI subscription tools. The bank projects this segment could reach $12 billion in annual recurring revenue by 2027.