Alphabet Inc. (NASDAQ:GOOGL) is now in the middle of its hottest run since the company first hit Wall Street, with shares rising nearly 5% to $286 on Thursday morning—marking a 63% rally over the last four months, its strongest performance since the early months of its 2004 IPO.
The surge follows a blockbuster third-quarter report and swelling analyst confidence that Alphabet's AI momentum is accelerating and far from priced in.
Analysts at Goldman Sachs and Bank of America are both raising their price targets, citing accelerating fundamentals and a clear lead in AI-driven services.
Chart: Google Notches Best 4-Month Rally Since December 2004
Goldman And BofA See Double-Digit Upside From Here
Goldman Sachs lifted its 12-month price target on Alphabet to $330, reflecting a 15% upside from current levels. The investment bank believes Alphabet is "increasingly well-positioned" for the multi-year transition toward AI-powered consumer and enterprise computing, with its AI solutions gaining scale across Search, Cloud, and Gemini.
Bank of America is even more bullish, raising its price target to $335, implying a 17% upside.
Analyst Justin Post said Google’s strong earnings reinforced its lead in AI infrastructure and usage, arguing that "AI integrations are proving additive to Search economics" and that Google is beginning to expand the overall digital information market, not just defend it.
A Blowout Quarter Driven by AI Adoption
According to Benzinga Pro, Alphabet reported third-quarter GAAP revenue of $102.35 billion, up 15.95% from a year ago and beating consensus by more than $2 billion, and delivered EPS of $2.87 versus expectations of $2.32 and 35.38% higher than last year.
Search revenue grew 15% year-over-year, while paid clicks accelerated to 7% from 4% in the prior quarter—despite heavy usage growth from OpenAI's services.
Goldman highlighted that Google's ad platform saw "broad-based strength across verticals," and that the combination of AI Overviews and Gemini-powered query formats is already scaling within Search. Management said these tools are driving both total and commercial query growth, showing that AI is enhancing—not cannibalizing—core monetization.
Google Cloud Becomes A Core Growth Engine
Google Cloud revenue surged 34% year-over-year to $15.2 billion, beating Wall Street expectations and outpacing Microsoft Azure’s growth on a tougher comp.
The cloud unit's backlog jumped $47 billion in a single quarter, reaching a record $155 billion, and operating margins improved to 23.7%, up more than 650 basis points from a year ago.
Both Goldman and BofA noted the growing role of custom TPUs—Google's in-house tensor processing units—in driving AI demand on the cloud.
According to Post, over 70% of Google Cloud customers now use AI products, and Gemini's ecosystem is helping attract large enterprise deals, many worth over $1 billion.
Alphabet’s AI Infrastructure Bet Keeps Growing
To support its AI roadmap, Alphabet raised its full-year 2025 CapEx guidance to $91 billion–$93 billion, up from $85 billion, and BofA expects that to grow to $122 billion in 2026, a 31% year-over-year increase.
Management said 60% of CapEx is now going into servers, with the rest funding data centers and networking.
What's Next For Alphabet Stock?
For the fourth quarter of 2025, Goldman sees Alphabet generating $112.16 billion in gross revenue and $2.50 in GAAP EPS, while projecting 2026 revenue of $391.92 billion.
Despite macroeconomic uncertainties around digital ad demand, the investment bank said Alphabet has successfully climbed a "steep wall of worry" and sees no reason for that momentum to slow.
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Image created using artificial intelligence via Midjourney.
