alphabet Shares rose 4% on Thursday after the company reported strong third-quarter results overall and increased capital spending for the year.
Google’s parent company cited continued strong cloud demand, raising its spending forecast for artificial intelligence infrastructure to $91 billion to $93 billion from $85 billion last quarter.
CEO Sundar Pichai said the company’s Google Cloud backlog was $155 billion at the end of the quarter.
“We expect capital spending to increase significantly as we move into 2026,” Chief Financial Officer Anat Ashkenazi told investors during an earnings call Wednesday.
deutsche bank “There is virtually no hair on the print page,” he said in a note, noting that preparations for Alphabet’s report were not easy, as the company’s stock price has risen 43% since it released its second-quarter results.
Pros: Alphabet is soaring after its latest earnings report. What Wall Street Analysts Say
Alphabet reported third-quarter profit of an adjusted $3.10. Revenue per share was $102.35 billion, the first quarter in which revenue exceeded the $100 billion benchmark.
Analyst estimates compiled by LSEG were for earnings of $2.33 per share and revenue of $99.89 billion.
A strong quarter and increased capital spending impressed analysts and solidified Alphabet’s position as an AI leader.
“While we continue to see multiple points in the past 12 months where Alphabet has navigated steep walls of uncertainty around AI themes, we see no reason to suspect it will pause or retreat in terms of operating evidence to change investor perception.” goldman sachs said in a memo.
Goldman Sachs raised its price target to $330 from $288.
Analysts were also watching for signs of how AI is impacting search, an area the company dominates.
Google’s search division had revenue of $56.56 billion in the quarter, an increase of 15% from a year earlier.
“While the move to AI search is seen as the biggest risk for Google, further signs that AI search is an opportunity rather than a threat will continue to flip the narrative.” JP Morgan The analyst wrote in a note:
Analysts raised their price target for the company from $300 to $340.
CNBC’s Jennifer Elias contributed to this article.
