Key Highlights
- Alphabet shares have surged 23% year-to-date in 2026 and climbed 135% over the trailing twelve months
- First-quarter earnings per share reached $5.11, obliterating the $2.68 Wall Street consensus; total revenue touched $109.9B
- The Google Cloud division expanded approximately 63% with revenue backlog skyrocketing to nearly $468B
- J.P. Morgan elevated its price objective to $460 while maintaining its Overweight stance
- A commanding 86% of Wall Street analysts tracking GOOGL maintain Buy recommendations
Shares of Alphabet were down 0.9% to approximately $382.20 during Monday’s trading session, yet this minor pullback hardly captures the magnitude of what many are calling one of this earnings season’s most impressive performances.
First-quarter earnings per share registered at $5.11, effectively doubling the Street’s $2.68 expectation. Total revenue reached $109.9B, marking a 21.8% year-over-year jump and surpassing the $106.96B projection.
The numbers spoke for themselves in no uncertain terms.
Google Cloud emerged as the undisputed star performer. This business unit expanded by roughly 63%, generating approximately $20B in quarterly revenue. However, the segment’s impact on Alphabet’s overall contracted revenue pipeline proved even more remarkable.
The company’s total revenue backlog nearly doubled quarter-over-quarter to $468B in Q1, surging from $243B in the previous period. Cloud accounts for 99% of this backlog, with management expecting over half to materialize as recognized revenue within a 24-month window.
Doug Anmuth, analyst at J.P. Morgan, characterized the backlog expansion as “the single-most impressive metric this earnings season thus far.”
The investment bank maintained its Overweight recommendation while increasing its price objective to $460 from the previous $395 target. Anmuth stated that GOOGL remains the firm’s “top overall pick” and projected the shares could climb higher driven by both earnings estimate revisions and valuation multiple expansion.
Following the quarterly disclosure, over 40 Wall Street analysts increased their price projections. Among the 74 research firms monitored by FactSet, 86% assign Buy-equivalent ratings to the stock.
Core Search Business Demonstrates Accelerating Momentum
Revenue from the core search business expanded 19% compared to the year-ago quarter, representing the fourth straight period of accelerating topline growth. J.P. Morgan indicated this trend validates Alphabet’s narrative that artificial intelligence is enhancing search functionality rather than cannibalizing it.
Additional firms joining the optimistic chorus include TD Cowen, Scotiabank, Raymond James, and Piper Sandler, each raising their price objectives following the quarterly results.
Skepticism persists in some corners. D.A. Davidson maintained a Neutral position, increasing its target to $375 from $310 while cautioning that the exceptional performance is “well reflected in the current valuation.”
Infrastructure Investment Remains Critical Monitoring Point
Alphabet provided guidance indicating 2026 capital expenditures will land in the $185–190B range, with additional increases anticipated for 2027. J.P. Morgan highlighted that elevated infrastructure spending will prove necessary to fulfill the massive cloud backlog, and investors will closely monitor the pace at which contracted backlog converts to recognized revenue.
Hardware sales are assuming greater significance as well. D.A. Davidson observed that Tensor Processing Unit (TPU) sales to cloud clients have been a primary catalyst behind backlog expansion, though the profitability dynamics of these arrangements remain somewhat unclear.
Alphabet also announced a dividend increase to $0.22 per share from $0.21, with the payment scheduled for June 15.
The equity carries a 52-week peak of $383.39 and currently trades within striking distance of surpassing Nvidia for the title of world’s most valuable publicly traded company, with its market capitalization standing at $4.64 trillion.
B. Metzler seel. Sohn & Co. AG expanded its Alphabet position by 16.5% during the fourth quarter to 322,820 shares valued at roughly $101.3M, establishing it as the firm’s 22nd-largest equity holding.
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