TLDR
- Alphabet stock fell 3.4% Thursday to $280.92, its lowest close since November 2025, after a jury ordered Google and Meta to pay $6 million in an addiction lawsuit
- GOOGL slipped a further 1.2% Friday to $277.70, putting the stock down more than 7% for the week
- Wells Fargo raised its price target on Alphabet to $397 from $387, maintaining an Overweight rating
- The bank cited TPU chip licensing to Anthropic and the $32 billion Wiz acquisition as new revenue drivers
- Analyst Ken Gawrelski said Alphabet “has all the pieces necessary to be an AI winner”
Alphabet dropped 3.4% Thursday, closing at $280.92 — its lowest level since November 14, 2025, per Dow Jones Market Data. The stock slipped again Friday, falling 1.2% to $277.70.
Thursday’s drop came after a jury ruled against Google’s YouTube and Meta in a lawsuit brought by a young woman who accused both platforms of designing their apps to be addictive. The jury ordered the two companies to pay $6 million to the plaintiff. Meta fell nearly 8% Thursday and was down another 1.5% Friday to $539.20.
The sell-off puts Alphabet on pace for a weekly loss of more than 7%.
Despite the pressure, Wells Fargo came out with a bullish note Friday morning. The firm raised its price target on Alphabet to $397 from $387, keeping its Overweight rating intact. That new target represents 41% upside from Thursday’s close.
Wells Fargo Points to New Revenue Streams
The note was led by analyst Ken Gawrelski, who wrote that Google is “leveraging its compute capacity advantage to develop new profit pools.”
Two moves stood out to the team. First, Google’s licensing of its tensor processing unit chips — known as TPUs — to Anthropic. Second, Alphabet’s $32 billion cash acquisition of cloud security firm Wiz, which closed March 11.
Wells Fargo estimates TPU licensing will add 4% to Google Cloud Platform revenue in 2026, rising to 7% in 2027. On the operating income side, the bank sees a 6% boost in 2026 and 14% in 2027. The Wiz deal is expected to add meaningfully on top of that.
Gawrelski said he’s “more comfortable with Google’s competitive position in search, given progress with AI mode and Gemini adoption.”
Analyst: Alphabet Has What It Takes to Win in AI
The Wells Fargo team went further, saying Alphabet “has all the pieces necessary to be an AI winner.”
That’s a pointed statement given the pressure Google Search has faced from AI-powered rivals over the past year.
Alphabet’s stock is now down more than 17% from its 52-week high. The Wells Fargo note puts the current price at a steep discount to where the bank sees fair value.
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