Alphabet Inc. stock could be poised for significant upside, with Wells Fargo projecting a potential 40% climb despite recent market pressure.
Indeed, on Friday, March 27, Wells Fargo raised its price target on the Google parent to $397 from $387, while maintaining an Overweight rating on the shares.
The latest revision implies roughly 45% upside from Alphabet’s closing price of $274.34, even as GOOGL stock declined $6.62 (-2.36%) on the day and extended its five-day losses to $28.21 (-9.32%).
Alphabet stock outlook driven by AI growth and cloud expansion
Notably, the bank’s bullish stance is underpinned by Alphabet’s expanding artificial intelligence footprint. In particular, Wells Fargo highlighted two key strategic drivers: its tensor processing unit (TPU) licensing agreements and the recently completed $32 billion acquisition of Wiz.
To begin with, Alphabet’s decision to license its proprietary TPU chips to Anthropic is expected to unlock new revenue streams. According to the firm, this initiative alone could contribute approximately 4% to Google Cloud Platform revenue in 2026, rising to 7% in 2027. At the same time, operating income could see a boost of 6% in 2026 and as much as 14% the following year.
Meanwhile, the Wiz acquisition is anticipated to further accelerate growth by strengthening Alphabet’s position in cloud security, a segment increasingly critical in enterprise AI adoption. Together, these moves reinforce Wells Fargo’s view that Alphabet is effectively leveraging its compute capacity advantage to create new profit pools.
As Ken Gawrelski noted, the tech giant “has all the pieces necessary to be an AI winner,” underscoring confidence in Alphabet’s long-term positioning.
GOOGL stock faces short-term pressure despite bullish forecast
That said, recent volatility has not gone unnoticed. The stock’s latest sell-off followed a courtroom decision in which a jury found YouTube and Meta liable in a lawsuit alleging the platforms engineered addictive features. The ruling resulted in $6 million in damages, adding short-term pressure to shares.
Even so, Wells Fargo’s outlook suggests that these legal headwinds may be overshadowed by Alphabet’s accelerating AI-driven growth trajectory, particularly as monetization opportunities within Google Cloud continue to expand into 2026 and beyond.
Featured image via Pixabay
