Sell-side on Mag-7 names (Alphabet and Microsoft) post-earnings: GOOGL sees PTs lowered, while MSFT sees them lifted

Sell-side on Alphabet (GOOGL) post-earnings: BMO lowers PT to USD 425 (prev. 480) and reiterates 'Outperform' rating and Top Pick; said while Search revenue was soft, Search queries grew at the fastest Y/Y rate in 5 years, as Co. expands AI Mode globally and underscores BMO's belief that most AI Mode searches are incremental. BMO adds, importantly, token consumption of GOOGL's models accelerated sequentially to 32bln tokens processed per minute, suggesting core AI adoption remains robust. Truist lowers PT to USD 410 (prev. 420) and maintains 'Buy'; said results fuelled by 103% Y/Y growth in Cloud show the positive impact of the AI investments management has been making and of the full-stack-strategy it's been pursuing. Adds TPU systems' inventory build-up and 3P capacity utilisation for cloud are likely to pressure near-term margins in Q4 & FY27 before TPU sales start scaling materially in FY27 & beyond, fuelling revenue growth and margin expansion over time. KeyBanc lowers PT to USD 385 (prev. 410) and maintains 'Overweight' rating; said Alphabet's Q3 results reinforced concerns KeyBanc had heading into the print, namely Search is decelerating and margins have peaked near-term. Adds it could create an air pocket over the next 1-2 quarters as investors await signs of whether this is transitory or structural. Sell-side on Microsoft (MSFT) post-earnings: Bernstein raises PT to USD 722 (prev. 662) and maintains 'Outperform' rating; gave the usual commentary about the strong results and guidance, but said while the results were solid believes the lower-than-expected capex and delays in capacity this quarter and for H2 created some unwarranted noise. UBS raises PT to USD 700 (prev. 675) and maintains 'Buy' rating; despite high expectations into the print, Co. delivered a solid beat, marked by an Azure beat, reaffirmed CY26 capex guide excl. impact of a 3P capacity delay, and total revs/EPS actuals and guide that landed above UBS's estimates. UBS adds given that OpenAI is now 30%+ of Azure revenues, Azure growth could be more variable depending on large lab customer growth. Citi raises PT to USD 680 and reiterates 'Buy' rating; said Cos. strong results demonstrated AI tailwinds across multiple fronts with broad-based upside across Azure, and strength in Copilot/M365. The results demonstrate MSFT's core business is benefitting as enterprise customers increasingly move AI into production. MSFT continued to show strong profitability and disciplined spending even as capex moves higher in H2 on the back of stronger demand. After a strong outlook on both top/bottom lines, Citi raises its estimates now projecting a 3pts faster Azure growth CAGR. Stifel raises PT to USD 650 (prev. 575) and reiterates 'Buy' rating; Azure and M365 acceleration set to continue. KeyBanc raises PT to USD 630 (prev. 600); said Q1 positive on all fronts and the three key areas that KeyBanc is focused on all showed meaningful upside, and the momentum in those areas is expected to continue for the remainder of the year.