Key Takeaways
- Alphabet shares declined 3.4% Thursday, settling at $280.92 — the lowest closing price since mid-November 2025, following a jury verdict requiring Google and Meta to pay $6 million in an addiction-related case
- The stock continued its descent Friday with an additional 1.2% drop to $277.70, marking a weekly decline exceeding 7%
- Wells Fargo increased its Alphabet price objective to $397 from $387 while reaffirming its Overweight stance
- The firm highlighted TPU chip licensing arrangements with Anthropic and the $32 billion Wiz purchase as emerging growth catalysts
- Wells Fargo’s Ken Gawrelski noted that Alphabet “has all the pieces necessary to be an AI winner”
Alphabet experienced a 3.4% decline Thursday, ending the session at $280.92 — marking its weakest close since November 14, 2025, according to Dow Jones Market Data. The downward momentum continued Friday with another 1.2% slide to $277.70.
Thursday’s selloff followed a jury decision against Google’s YouTube and Meta in litigation filed by a young plaintiff alleging both companies intentionally designed addictive platform features. The jury awarded $6 million in damages to the complainant. Meta saw a nearly 8% plunge Thursday and extended losses Friday with a 1.5% drop to $539.20.
The sustained selling pressure has positioned Alphabet for a weekly decline surpassing 7%.
However, Wells Fargo issued an optimistic assessment Friday morning. The investment bank elevated its Alphabet price target to $397 from $387 while maintaining its Overweight recommendation. This revised target implies 41% appreciation potential from Thursday’s closing level.
Wells Fargo Highlights Emerging Revenue Opportunities
Analyst Ken Gawrelski authored the note, stating that Google is “leveraging its compute capacity advantage to develop new profit pools.”
The firm emphasized two strategic initiatives. First, Google’s licensing program for its tensor processing unit chips — commonly called TPUs — to Anthropic. Second, Alphabet’s $32 billion all-cash purchase of cloud security company Wiz, which finalized on March 11.
Wells Fargo projects TPU licensing will contribute 4% to Google Cloud Platform revenue during 2026, expanding to 7% in 2027. From an operating income perspective, the bank anticipates a 6% enhancement in 2026 and 14% in 2027. The Wiz transaction is expected to provide substantial additional benefits.
Gawrelski indicated he’s “more comfortable with Google’s competitive position in search, given progress with AI mode and Gemini adoption.”
Analyst: Alphabet Positioned to Dominate AI Landscape
The Wells Fargo analysts went on record asserting Alphabet “has all the pieces necessary to be an AI winner.”
This represents a bold endorsement considering the competitive challenges Google Search has encountered from AI-driven alternatives throughout the past year.
Alphabet’s shares have now retreated more than 17% from their 52-week peak. The Wells Fargo analysis suggests the current valuation represents a significant markdown from the bank’s calculated fair value.
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