Alphabet Inc. (GOOGL)
Morningstar has a $340 price target for GOOGL’s stock over the next 12 months, reflecting stronger-than-expected fundamentals across both its core Search business and its fast-growing Cloud segment.
Alphabet’s Search division continues to outperform, benefiting from resilient advertising demand, improvements in ad-targeting efficiency, and strong mobile engagement. Morningstar notes that Search remains one of the most profitable digital businesses in the world, supported by Alphabet’s unmatched data scale, superior machine-learning capabilities, and deeply entrenched user behavior. Despite rising competition, especially from AI-driven search tools and emerging models, Morningstar believes Google’s dominant market position remains firmly intact, warranting a wide economic moat.
In addition to search strength, Google Cloud has showed solid revenue acceleration, underscoring its growing role as a key earnings driver. Enterprise customers are expanding spending on AI workloads, data analytics, and digital-transformation initiatives, helping Cloud margins continue to move higher. Morningstar highlights that Google Cloud is steadily closing the profitability gap with its larger hyperscale peers, reflecting better cost discipline, improving scale, and higher-value service adoption.
Morningstar also acknowledges Alphabet’s increasing investments in AI, both in infrastructure and foundational models and believes the company is well-positioned to monetize AI across ads, cloud, and consumer products. Although competition from Microsoft, OpenAI, Amazon, and Meta is intensifying, Morningstar views Alphabet as one of the few firms with the compute infrastructure, proprietary data, and distribution necessary to remain a leader in generative AI.
The firm does caution that regulatory and antitrust scrutiny remains a material long-term risk, particularly in the U.S. and Europe, but concludes that these pressures do not materially alter Alphabet’s moat or growth trajectory.
Overall, Morningstar’s updated forecast reflects Alphabet’s durable revenue streams, improving operating leverage, and strengthening cloud momentum. With a $340 price target, Morningstar sees solid long-term upside grounded in Alphabet’s unmatched position at the intersection of AI, search, cloud, and digital advertising.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
