Google stock falls despite strong earnings and wave of price target hikes

Alphabet posted its fourth quarter 2025 earnings after the bell on Wednesday, delivering results that came in above Wall Street expectations. Despite the beat, the stock tumbled as much as 7% on Thursday morning, opening near $312 before recovering to around $322 by midday, still well below its $332 close ahead of the report.

The company reported revenue of $113.8 billion and earnings per share of $2.82, topping analyst estimates of $111.2 billion in revenue and $2.57 in EPS.

The initial selloff appears tied to Alphabet’s capital expenditure forecast of $175 billion to $185 billion for 2026, which sparked concern among investors that AI infrastructure spending could outpace monetization in the near term.

Despite the market reaction, analysts responded positively to the report. The strong results and continued rollout of Alphabet’s Gemini AI model across Search, Ads, and Workspace led to a wave of upgraded price targets.

JPMorgan raised its GOOGL target to $395 from $385, Barclays to $360 from $315, and Canaccord to $415 from $390. KeyBanc increased its target to $370, and Pivotal Research now holds the highest at $420, up from $400. Piper Sandler raised its forecast to $395 from $365.

While the short-term reaction was negative, Wall Street’s outlook remains bullish as Alphabet leans further into its AI and cloud investment cycle.