Sell-side on Alphabet (GOOGL): Despite a stellar Q4 report, shares slide on CapEx concerns

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  Pivotal Research raises PT to USD 420 (prev. 400) and keeps a ‘Buy’ rating; reported much stronger than exp. Q4 results & firm says Alphabet posted its fourth straight Q of accelerating Y/Y search rev. growth of 17%. Search is a "resilient cash cow with pricing power," driving Alphabet' "best-in- class Gemini AI"


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  Canaccord raises PT to USD 415 (prev. 390) and keeps a ‘Buy’ rating; Cos. search momentum & cloud growth acceleration reinforce its AI investment case. The firm believes Alphabet should be a core holding in large-cap tech portfolios


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  BMO Capital raises PT to USD 400 (prev. 343) and keeps an ‘Outperform’ rating; said it reported a very impressive Q & Google remains a clear leader across the AI stack


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  JPMorgan raises PT to USD 395 (prev. 385) and keeps an ‘Overweight’ rating; yet another firm highlighting “very strong” Q4 results, but the firm believes Alphabet's capex will be the story. Believes the doubling of capex Y/Y in 2026 "comes from a position of strength" & Gemini now at 750mln MAUs & showing significantly higher engagement per user


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  Piper Sandler raises PT to USD 395 (prev. 365) and keeps an ‘Overweight’ rating; notes Google reported an impressive Q4. Search/Cloud both accelerated again, although YouTube decelerated notably. Overall, strong results despite the capex pressure on FCF.


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  Citizens maintains PT of USD 385 and keeps an ‘Outperform’ rating; highlighted a strong Q. & how it is sharply increasing AI investment as it leverages its cash-generative core to compete more aggressively w/ META & OpenAI


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  Cantor Fitzgerald maintains PT of USD 370, ‘Overweight’ rating & Top Pick designation; Echoes familiar comments re. stellar Q4 report & adds despite FY26 CapEx guidance coming in far above exp., results reinforce confidence in Alphabet's AI-driven competitive position & support the view that incremental investment can generate healthy returns & sustain growth in coming quarters


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  KeyBanc raises PT to USD 370 (prev. 360) and keeps an ‘Overweight’ rating; reflects faster Cloud growth in sum-of-the-parts framework. Adds GOOGL is stepping up capex to support Google Services & Cloud growth. But concerns on the scale of investment will likely persist, but hard to argue w/ results, adding Search accelerated throughout ‘25, Cloud backlog grew ~55% Q/Q, & Gemini now has >750mln MAUs


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  Barclays raises PT to USD 360 (prev. 315) and keeps an ‘Overweight’ rating; says Cos. AI "story is cranking on full flex-mode" w/ 48% Cloud growth in the Q & a "massive jump" in backlog


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  UBS raises PT to USD 348 (prev. 345) and keeps a ‘Neutral’ rating; remarks Google's GenAI CapEx is driving faster-than-exp. return on invested capital, boosting ad rev. by USD 5-6bln & cloud rev. by USD 19-23bln for 2026-27. But, higher-than-exp. CapEx raises total costs, muting EPS impact to only 1% in ‘27, supporting a Neutral view given shares are near peak multiples.

Reaction details (13:08)

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  GOOGL -4.2% in pre-market trade.

Analysis details (13:08)

• Overall, Q4 earnings were extremely strong, highlighted by rev. EPS & EBIT above St. estimates, alongside accelerating growth in search and cloud revenue. However, it appears the tech behemoth hiking CapEx is driving the narrative, at least for now, reviving investor concerns about the scale and payback of its AI investment plans.

05 Feb 2026 - 13:07- EquitiesResearch Sheet- Source: Newsquawk