Google Stock Price Forecast: Alphabet (GOOG) Trades at $311 While Cloud Revenue Explodes 48% to $17.7 Billion

Google Stock (NASDAQ:GOOG) Forecast: Alphabet Trades at $311 While Cloud Revenue Explodes 48% to $17.7 Billion — CapEx Doubles to $185 Billion, Gemini Reaches 750 Million Monthly Users, Waymo Enters Chicago and Charlotte, and the Math Says Fair Value Is $388

Saturday, February 28, 2026 | TradingNews.com

Alphabet (NASDAQ:GOOG) closed Friday at $311.43, up $4.28 or 1.39% on the session, with after-hours trading pulling back to $308.75 (-0.86%). The stock has depreciated roughly 9% since early February and sits 11% below its 52-week high of $350.15 — a decline that has occurred despite the company delivering one of the strongest quarterly earnings reports in its history. Q4 revenue hit $113.82 billion, growing 17.9% year-over-year and beating consensus by more than $2 billion. Google Cloud exploded 48% to $17.66 billion. The Gemini chatbot surpassed 750 million monthly active users. Waymo announced expansion into two new cities. And yet the stock trades at 26.62 times forward earnings — cheaper than Amazon — because the market cannot reconcile one number: CapEx guidance of $175 billion to $185 billion for 2026, nearly double the $91.45 billion spent in 2025. That disconnect between accelerating fundamentals and a contracting valuation multiple is the single most important dynamic in mega-cap tech right now, and it points to a stock that is materially undervalued at $311.

Q4 Revenue of $113.82 Billion — An 18% Growth Rate That Accelerated From the Prior Quarter

The top-line numbers speak for themselves. Alphabet (NASDAQ:GOOG) generated $113.828 billion in fourth quarter revenue, representing 18% year-over-year growth. That is an acceleration from Q3's 16% growth rate — and acceleration at this scale is rare for a company generating over $400 billion in annual revenue. The $2.35 billion earnings beat above consensus was not a rounding error or a one-time item. It reflects broad-based strength across multiple business segments, driven by the ongoing digital advertising cycle and the explosive demand for cloud computing infrastructure.

Full-year 2025 revenue growth came in at 15.1%, and the consensus for FY2026 has already been revised higher to 16.75%. The company received 50 upward revenue revisions and zero downward revisions in recent months — a level of analyst unanimity that is almost unprecedented for a company of this size. Wall Street rates GOOG a Strong Buy with a score of 4.61 out of 5. The fundamental trajectory is not ambiguous. Revenue is accelerating, margins are expanding in the highest-growth segment, and the competitive position in both search and cloud is strengthening, not weakening.

Google Cloud's 48% Revenue Surge — 14 Percentage Points of Acceleration in a Single Quarter

Google Cloud is the story within the story, and the numbers are extraordinary. Q4 cloud revenue reached $17.664 billion, up 48% year-over-year. To appreciate the magnitude: Q3 growth was 34%, which itself was a 2-percentage-point acceleration from Q2. Q4 then added 14 percentage points of acceleration in a single quarter. That trajectory — 32% to 34% to 48% — is not linear improvement. It is exponential demand growth driven by the generative AI infrastructure buildout that is reshaping enterprise computing.

The profitability expansion is equally striking. Google Cloud's operating margin expanded by 12.6 percentage points year-over-year in Q4. For context, the prior quarter already showed a staggering 660 basis point improvement. The cloud business is scaling at a pace where revenue growth dramatically outstrips cost growth — the hallmark of a platform business reaching critical mass. This is a segment that was consistently unprofitable three years ago and is now generating operating margins that would be the envy of most standalone software companies.

Google Cloud Is Powering Its Own Competitors — And Getting Paid For It

One of the most underappreciated dynamics in Alphabet's cloud business: the company is providing computing power to OpenAI and Anthropic — its direct rivals in the chatbot and AI assistant market. The generative AI revolution has created such enormous demand for compute that even competitors must buy capacity from Google's infrastructure. This creates a heads-I-win, tails-I-still-win dynamic for GOOG: if Gemini dominates the chatbot market, Alphabet wins directly. If competitors like ChatGPT or Claude gain share, Alphabet still profits from providing the underlying infrastructure. Few businesses in technology history have enjoyed this kind of structural advantage.

For comparison, Amazon Web Services reported 24% growth in its most recent quarter — strong by any conventional standard but sluggish relative to Google Cloud's 48%. Microsoft Azure posted 39% growth, closer to Google but still trailing. The growth differential matters for valuation: GOOG trades at 26.62 times forward earnings versus Amazon's higher multiple, despite delivering cloud growth that is double Amazon's rate. That relative discount is unjustified by the fundamentals and represents a clear opportunity.

The Search Empire — $63 Billion in Quarterly Revenue With 90% Global Market Share

While cloud grabs the headlines, Google's search business remains the foundation — and it continues to compound at impressive rates. Q4 search revenue was $63.08 billion, up from $54.03 billion a year ago, representing 16.7% growth. With nearly 90% of the global search engine market, Alphabet captures more advertising spend than any other single platform on Earth.

The AI integration into search is working. AI Overviews — the product that embeds AI-generated summaries directly into search results — is performing well according to management's Q4 commentary. AI Mode, a more immersive AI-powered search experience, has seen daily query growth in the United States and, critically, users are engaging in longer sessions. Longer sessions mean more ad impressions, more data, and more revenue per search — exactly the monetization trajectory that justifies the AI investment.

The fears that ChatGPT and competing AI assistants would cannibalize Google Search have not materialized in the financial results. Traffic data from BNP Paribas' AI tracker shows Gemini experiencing accelerating website visits and app daily active user growth, while OpenAI's ChatGPT has actually experienced a decline in traffic. The competitive landscape is shifting in Alphabet's favor, not against it.

Gemini at 750 Million Monthly Active Users — And Still Innovating

The Gemini chatbot has reached over 750 million monthly active users, making it one of the most widely used AI products on the planet. Engagement metrics are rising, and market share is being gained at a time when the perceived leader — ChatGPT — is seeing traffic erosion. This is a meaningful competitive inflection.

The product roadmap continues to advance. On February 18, Alphabet rolled out a custom music generation feature for Gemini, currently in beta on the desktop app. The next day, Gemini 3.1 Pro launched with enhanced complex problem-solving and reasoning capabilities. These are not incremental updates — they represent the kind of rapid capability expansion that drives user adoption and stickiness. The music generation feature in particular expands Gemini's utility beyond text-based tasks into creative applications, widening the addressable market.

Waymo Enters Chicago and Charlotte — Stress-Testing Autonomous Driving in Harsh Conditions

Waymo, Alphabet's autonomous vehicle subsidiary, announced expansion into Chicago and Charlotte. The Chicago deployment is particularly significant: the city is being treated as a stress test for Waymo's ability to handle harsh winters, extreme congestion, and dense urban conditions. This is not a soft-launch in a Sun Belt suburb — it is a deliberate challenge to prove that autonomous driving works in the most demanding environments on the North American continent.

The technology enabling this expansion is DeepMind's Genie 3, an AI model that creates realistic digital worlds to help Waymo's vehicles handle hard-to-predict situations. By simulating millions of edge cases — icy intersections, construction zones, erratic pedestrian behavior — Waymo can accelerate training without waiting for real-world data collection. This should improve safety performance, quicken regulatory approval processes, and ultimately compress the timeline to national scalability.

Autonomous vehicles remain a "next decade" revenue story for Alphabet, but the optionality is enormous. The global robotaxi market is projected to exceed $100 billion by the early 2030s, and Waymo is the clear leader with the most miles driven, the most cities served, and the most advanced technology stack. At $311 per share, the market is assigning very little value to Waymo — which means any acceleration in regulatory approval or commercial deployment is pure upside that is not priced in.

The CapEx Question — $175 to $185 Billion in 2026, and Why It's the Right Call

The market's primary concern with Alphabet (NASDAQ:GOOG) is the CapEx guidance. Management expects capital expenditures of $175 billion to $185 billion in 2026, up from $91.45 billion in 2025 — a near-doubling that represents the largest infrastructure investment commitment in corporate history. Q4 alone saw $27.851 billion in CapEx, a 95% year-over-year increase. To fund part of this expansion, the company announced a $100 billion century bond offering.

The knee-jerk market reaction — selling the stock on CapEx fears — ignores two critical facts. First, Google Cloud's 48% revenue growth would not have been possible without aggressive infrastructure investment. The ROI question that bears keep raising has already been answered by the financial results: cloud margins expanded 12.6 percentage points while revenue grew 48%. The investments are generating returns in real time, not in some hypothetical future state.

Second, Alphabet's cash flow generation remains robust even at elevated CapEx levels. Q4 operating cash flow was $52.402 billion. After the $27.851 billion in property and equipment purchases, free cash flow was still $24.551 billion — in a single quarter. Trailing twelve-month operating cash flow is $164.713 billion. Yes, $175–$185 billion in CapEx exceeds TTM operating cash flow, which is why the century bond exists. But this is a company with $126.84 billion in cash reserves against $66.99 billion in total debt — a net cash position of nearly $60 billion. The balance sheet can absorb this spending without financial stress.

Management Also Flagged Meaningfully Higher Depreciation — And That Actually Helps

A detail that most market participants overlooked: management noted during the Q4 call that depreciation and amortization will "meaningfully increase later this year" as the CapEx investments hit the P&L. This matters for DCF modeling because higher D&A increases non-cash charges that reduce reported operating income but do not affect cash flow. Higher depreciation compresses reported margins on paper while the underlying cash generation remains strong. It also creates a larger tax shield, reducing actual cash tax payments and improving after-tax free cash flow. The accounting optics will look worse than the economic reality — a dynamic that sophisticated buyers should exploit while the market focuses on headline margin compression.

The Balance Sheet — $126.84 Billion in Cash, and OpenAI Cannot Say the Same

Alphabet sits on $126.84 billion in cash and short-term investments against $66.99 billion in total debt. That net cash position of approximately $60 billion provides an extraordinary buffer against any downturn, competitive threat, or CapEx overshoot. For context: OpenAI generated $13 billion in total revenue in 2025 and remained unprofitable. OpenAI plans to spend aggressively on compute expansion in the coming years, but unlike Alphabet, it does not have a $63 billion quarterly search business or a $17.7 billion cloud segment generating expanding margins to fund that spending. If the AI investment cycle hits a downturn — if there is a "CapEx winter" — the companies that survive will be those with massive, diversified, cash-generating businesses behind them. Alphabet is arguably the best-positioned company in the world on that metric.

Valuation — 26.62x Forward P/E, Below Amazon, and DCF Shows $388.68 Fair Value

Google Stock (NASDAQ:GOOG) trades at 28.82 times trailing earnings and 26.62 times forward earnings — a multiple that has corrected from above 30 in recent months. The trailing P/E reflects the current stock price of $311.43 against the LTM earnings run rate. The forward P/E incorporates consensus FY2026 estimates that assume 16.75% revenue growth, with EPS beaten by $0.18 in Q4 alone.

The relative valuation is compelling. Amazon trades at a higher forward P/E despite reporting AWS growth of just 24% — half of Google Cloud's 48%. Microsoft's forward multiple is lower, but Azure growth at 39% also trails Google Cloud, and Microsoft recently faced its own CapEx-related selling pressure. The market is effectively penalizing Alphabet more than its cloud peers for spending aggressively, despite Alphabet showing the strongest growth results from that spending.

A discounted cash flow model incorporating the updated Q4 financials, 17% revenue growth assumptions for FY2026, CapEx of $175–$185 billion, meaningfully higher D&A, and slightly reduced EBIT margins yields a fair value of $388.68 per share. At $311.43, the stock trades at a 19.9% discount to intrinsic value. Even if the fair value estimate is reduced by 10% for conservatism — accounting for potential AI investment overruns or cyclical advertising weakness — the implied price of $350 still represents 12.4% upside from current levels.

The $15 Billion India Investment — Positioning for the Next Decade of Cloud Demand

In October 2025, Alphabet announced a $15 billion investment over five years to build a data center and AI hub in Visakhapatnam, India. CEO Sundar Pichai's recent visit to the country during India's AI summit reinforced the strategic commitment. India represents one of the largest untapped markets for cloud computing and AI services globally, with enterprise digitization still in early stages and a rapidly growing developer ecosystem. While $15 billion over five years is modest relative to the $175–$185 billion annual CapEx budget, the signal matters: Alphabet is building global infrastructure before demand fully materializes, which is how platform businesses cement dominant positions.

Risks — TPU Roadblocks, AI Bubble Fears, and the Iran Strikes

The TPU opportunity has hit some friction. A recent report indicated that marketing Tensor Processing Units to rival cloud providers is proving difficult — Microsoft Azure and Amazon AWS are unlikely to deploy a competitor's silicon in their own data centers. Meta, which was initially seen as a potential large-scale TPU customer, recently signed another chip deal with Nvidia instead. The addressable market for TPU sales may be more limited than optimists projected, shifting the customer base toward neoclouds and smaller AI companies rather than hyperscaler peers. This is not a material risk to the overall business thesis — TPU revenue is a rounding error against $113 billion quarterly revenue — but it does temper one of the secondary growth narratives.

The broader AI bubble concern is the primary headwind for GOOG's stock price. The S&P 500 is tracking toward its worst month since March 2025. AI enthusiasm that drove the Magnificent Seven rally through 2024 and into 2025 has cooled significantly as earnings growth has not justified the multiple expansion for several names. Nvidia dropped 5.55% despite beating earnings expectations. The market is in "show me" mode, demanding proof that AI CapEx generates returns. Alphabet's Q4 results provide that proof — Google Cloud's 48% growth and 12.6-point margin expansion are the most compelling evidence in the sector that AI spending works — but the market is not discriminating between good spenders and questionable spenders right now. Everything AI-related is being sold together.

The Iran strikes add a layer of near-term macro risk. The U.S. and Israel launched military operations against Iran on Saturday, with Iranian retaliation hitting multiple Gulf states. Risk-off sentiment on Monday's open will pressure all equities, including GOOG. The digital advertising market is exposed to any consumer spending slowdown that follows sustained geopolitical instability or an oil price shock. If Brent crude runs toward $80+ and sustained conflict dampens economic activity, the 16.75% revenue growth consensus for FY2026 could face downward pressure from the advertising component, even if cloud continues to accelerate.

Cost Discipline — Revenue Growth Outpaced Cost Growth Despite Massive R&D Expansion

Alphabet's cost of revenue increased 13% in Q4 — meaningfully below the 18% top-line growth rate, which implies gross margin expansion even though the company doesn't formally report gross margin as a metric. Operating expenses grew 29%, but the primary driver was a 42% surge in R&D spending — a deliberate investment in innovation capacity, not a sign of cost discipline failure. The R&D intensity reflects Gemini development, Waymo's autonomous driving stack, cloud infrastructure optimization, and next-generation TPU design.

Operating margin compressed 50 basis points year-over-year on a consolidated basis, but this is entirely attributable to the R&D investment choice, not to structural deterioration. EPS growth decelerated from 35% to 31%, still beating consensus by $0.18 — a deceleration from exceptional to merely outstanding. At the bottom line, Alphabet is not sacrificing profitability for growth. It is investing more in R&D while simultaneously generating higher revenue, higher operating cash flow, and higher free cash flow than at any prior point in its history.

The Stock Price Setup — $311.43, Down 11% From the $350 High, With a $142.66 Year Low

GOOG closed at $311.43, within a day range of $303.59 to $312.08 and well below the 52-week high of $350.15 set in late 2025. The 52-week low of $142.66 was established before the AI-driven rally that more than doubled the stock. Market cap stands at $3.77 trillion. Average daily volume is 23.35 million shares. The dividend yield is 0.27% — nominal, but the company's capital allocation priorities are clearly weighted toward CapEx and buybacks rather than income distribution.

The after-hours pullback to $308.75 (-0.86%) heading into the weekend, combined with the Iran strikes Saturday morning, suggests GOOG may gap lower on Monday's open. A retest of Friday's session low near $303.59 — or even the $300 psychological level — is plausible in a risk-off tape. That level, if reached, would represent a 14.2% decline from the 52-week high and would bring the forward P/E below 26, creating an even more compelling entry point.

The Antitrust Overhang — Still Present, But Not Existential

The antitrust ruling against Google remains a background risk that has been discussed extensively elsewhere and does not fundamentally alter the investment thesis. The remedies phase is ongoing, and any structural changes — if they materialize — would take years to implement. More importantly, the 48% cloud growth, the Gemini user adoption curve, and the Waymo expansion demonstrate that Alphabet's growth is increasingly diversified beyond the search business that is the subject of antitrust scrutiny. Even in a worst-case scenario where search market share erodes modestly, the cloud and AI businesses provide an independent growth engine that did not exist five years ago.

The Verdict — Google Stock (NASDAQ:GOOG): Strong Buy at $311, Fair Value $388, Near-Term Target $350

Google Stock (NASDAQ:GOOG) at $311.43 is a strong buy.

The fundamental case is as clear as it gets in mega-cap tech. Revenue of $113.82 billion growing 18% with a $2.35 billion beat. Google Cloud at $17.66 billion growing 48% with 12.6 points of margin expansion. Search at $63 billion with 90% global market share and AI integration driving longer, more valuable sessions. Gemini at 750 million MAUs and gaining share while ChatGPT traffic declines. Waymo entering Chicago and Charlotte to prove national scalability. $126.84 billion in cash against $66.99 billion in debt. $52.4 billion in quarterly operating cash flow. $24.6 billion in quarterly free cash flow even after the most aggressive CapEx quarter in corporate history. Fifty upward revenue revisions and zero downward. Wall Street consensus: Strong Buy, 4.61/5.

The valuation case is equally straightforward. Forward P/E of 26.62 is below Amazon (which has half the cloud growth rate), represents a meaningful pullback from above 30, and a DCF model incorporating all known Q4 financials produces a fair value of $388.68 — a 24.8% premium to the current price. Even with conservative adjustments, $350 is a defensible near-term target that simply reflects a return to the valuation the stock held before AI CapEx fears triggered the February selloff.

The risks are real but manageable. The $175–$185 billion CapEx is enormous in absolute terms, but it is generating 48% cloud growth and 12.6-point margin expansion — demonstrable ROI in the financial results, not a future promise. The TPU sales roadblock is a secondary narrative that does not move the needle on a $113 billion quarterly revenue base. AI bubble fears are compressing multiples across the sector, but Alphabet is the strongest fundamental performer in the group and will be the first to re-rate when sentiment normalizes. The Iran strikes create near-term volatility that could push the stock to $300 or below on Monday — which would be a gift.

Any dip below $305 on the Monday open deserves aggressive accumulation. The 12-month target is $375–$390, consistent with the DCF fair value and representing 20–25% upside from current levels. Alphabet has $60 billion in net cash, the fastest-growing major cloud platform on the planet, 750 million monthly users on its AI chatbot, the dominant search franchise with 90% market share, and a forward P/E below 27. The market is handing this stock over at a discount because of a CapEx number that the Q4 results have already justified. Take it.

That's TradingNEWS