Bank of America Lowers Google Price Target to $175 on Cloud, Ad Concerns
Bank of America cut its 12-month price target on Google from $190 to $175 after its Q4 report, citing slower than expected cloud revenue growth and softer ad spend. The firm trimmed FY26 EPS estimates by 5% while maintaining a Buy rating on Alphabet shares.
1. Forecast Adjustment Details
Bank of America reduced its 12-month price target on Alphabet Inc. from $190 to $175 following Google’s Q4 earnings release. The adjustment reflects a 5% reduction in the firm’s FY26 EPS forecasts and incorporates updated guidance on capital expenditure and margin pressure.
2. Cloud and Advertising Drivers
Analysts highlighted that Google Cloud revenue grew at 22% year-over-year, missing the bank’s 25% growth expectation, while YouTube ad revenue decelerated to 8% growth versus a projected 12%. These shortfalls prompted the forecast reset.
3. Rating and Outlook
Despite lowering the target, Bank of America maintained a Buy rating, citing Google’s robust search franchise and ongoing cost-control measures. The firm sees long-term upside driven by AI integration across its ad and cloud platforms.