Alphabet's Stock Multiple Driven by Search Innovation, Scaling Agentic Offerings, Morgan Stanley Says

MT Newswires Live10-29 23:16

Alphabet's (GOOG, GOOGL) stock multiple will be driven by search innovation, scaling agentic offerings and its ability to drive revenue growth through this transition, as tensor processing unit, or TPU, sales are lower multiple earnings, Morgan Stanley said in a Thursday note.

Building on this, Morgan Stanley said that re-rating the company's stock in 2027 will likely depend on successfully shipping products like latest the Gemini agents to material chunks of users and driving faster revenue growth from them.

Morgan Stanley lowered its 2027 and 2028 earnings per share estimates by 2%. While revenue estimates are largely unchanged, Morgan Stanley expects Google Search revenues to come down by 1% for both 2027 and 2028, while Google Cloud revenues move up by 3% and 2%, respectively.

Morgan Stanley lowered its price target on Alphabet to $375 from $400 and maintained its overweight rating.

Price: 284.04, Change: -37.85, Percent Change: -11.76

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