Sell-side on Alphabet (GOOGL) post-earnings: Mixed responses amid capex hike, as Wedbush adds it to 'Best Ideas List'

Pivotal Research raises PT to USD 475 (prev. 470) and keeps a 'Buy' rating; said reported a "much stronger-than-expected" Q2 report, highlighted by a fifth straight quarter of accelerating cloud revenue to 82%. The firm continues to believe Alphabet is the most well positioned of its peers to monetise its massive AI investment across all its properties. Citi reiterates PT at USD 447 and keeps a 'Buy' rating; said Google's AI investments are driving results across both Search and Cloud. Adds the debates post Q2 '26 are likely to focus on: 1) Timing around Google's SOTA FM strategy, led by Gemini 4 (Citi expects a Q4 launch) with coding Tools; 2) Margins; 3) CAPEX spend growth as FCF turned negative in Q2. However, underlying these debates are greater AI demand trends. Citi acknowledge Gemini's model roadmap is delayed and 3P compute limits Google Cloud Platform margin expansion, but it also believes GOOGL's full-stack approach, commitment to SOTA FMs, and potential for greater model velocity with G-4 can deliver continued strong results. Wedbush reiterates PT at USD 445 and keeps an 'Outperform' rating; was added to Wedbush's Best Ideas list. Says while outside of Cloud revenue growth, the quarter wasn't a blowout, and capex guidance is increasing again, believes results reinforce its thesis that Alphabet's full-stack AI position is translating into real Cloud share gains, even as near-term profitability is limited by rising AI-related spend. Barclays raises PT to USD 425 (prev. 405) and keeps an 'Overweight' rating; noted a solid Q1 report across most key revenue lines, highlighted once again by cloud accelerating. However, Barclays says the cost of infusing AI everywhere is driving a spending "explosion" for Alphabet, pressuring margins in the near term. Wells Fargo lowers PT to USD 411 (prev. 418) and keeps an 'Overweight' rating; firm is supportive of prioritisation of investments for long-term strategic positioning. However, it likely results in near-term pain on margins and return profile. Tougher Services comparisons, cloud margin pressure and higher CapEx in H2 create overhang on shares. Oppenheimer lowers PT to USD 400 (prev. 445) and keeps an 'Outperform' rating; cites reduced services margins and higher financing costs. Morgan Stanley lowers PT to USD 400 (prev. 415) and keeps an 'Overweight' rating; Google Cloud showed the ROIC and GenAI capex, and opportunities are getting larger, but with EPS heading about 5% lower as investments outweigh revenues, new products and visibility into FY28 are "key from here".