Morgan Stanley Raises Alphabet's Price Target to $210, Citing Accelerating Cloud Revenue Growth

Morgan Stanley reiterated Alphabet's "Overweight" rating and raised its price target to $210 per share. Analyst Brian Nowak is optimistic about Google's accelerating cloud revenue growth and AI-based engagement metrics. The firm believes Alphabet's innovation cycle is not yet priced in and expects durable multi-year growth.

July 02, 2025 - Morgan Stanley has reiterated its "Overweight" rating for Alphabet Inc. (NASDAQ: GOOGL) and raised its price target to $210 per share. The firm, in a recent note, cited accelerating cloud revenue growth and AI-based engagement metrics as key drivers for the optimistic outlook [1].

Analyst Brian Nowak, who authored the report, highlighted Alphabet's innovation cycle, noting that it is not yet fully priced in by the market. The firm expects durable multi-year growth for the tech giant, particularly driven by its cloud computing and AI services [1].

Alphabet's Q2 2025 financial results showed strong performance across its core business units. Google Cloud revenue jumped 32%, hitting $13.6 billion, driven by demand for core cloud products, AI infrastructure, and generative AI services [3]. This growth aligns with Morgan Stanley's expectations and underscores the company's leadership in the cloud computing sector.

The firm also noted Alphabet's AI tools, such as AI Overviews and Gemini, which are rapidly gaining traction. AI Overviews, Google's AI-powered search summaries, now reach over 2 billion monthly users, up from 1.5 billion just a quarter ago [3]. The Gemini AI chatbot has surpassed 450 million monthly active users, further evidence of the company's success in AI engagement [3].

While Alphabet's AI advancements are enhancing user engagement and search capabilities, they are also driving up energy consumption, which is a growing concern for the company's sustainability efforts [3]. Despite this, Alphabet remains committed to its climate moonshots, aiming to run its operations on carbon-free energy 24/7. In 2024, the company procured over 8 GW of clean energy, the highest in company history [3].

Morgan Stanley's analysis suggests that Alphabet's stock could continue to perform well, driven by strong growth in its core businesses and innovation in AI and cloud computing. The firm's price target of $210 per share reflects its optimistic view on the company's future prospects [1].

References:
[1] https://finance.yahoo.com/news/alphabet-googl-gets-price-target-132402965.html
[2] https://finance.yahoo.com/news/three-questions-investors-want-answered-090000480.html
[3] https://carboncredits.com/alphabets-googl-q2-2025-growth-soars-but-ai-challenges-net-zero-goals/