Alphabet Awarded $200 Million AI Contract from US Defense Department

Alphabet, the parent company of Google, has been awarded a $200 million contract from the US Department of Defense for AI projects. This is the company's first contract for AI work with the Defense Department, and Alphabet joins privately held start-ups Anthropic, OpenAI, and xAI in receiving awards. The projects will aim to develop AI agents across various mission areas, with the goal of maintaining strategic advantage over adversaries. Alphabet's stock has a consensus Strong Buy rating among analysts, with a target price of $202.24, implying a 12.24% upside from current levels.

Alphabet Inc., the parent company of Google, has been awarded a $200 million contract by the U.S. Department of Defense (DoD) for AI projects. This marks the company's first contract for AI work with the Defense Department and places Alphabet alongside privately held start-ups Anthropic, OpenAI, and xAI, which have also received substantial awards [1][2][3].

The contract aims to develop AI agents across various mission areas, with the goal of maintaining strategic advantage over adversaries. The DoD's Chief Digital and Artificial Intelligence Office stated that the adoption of AI is transforming the department's ability to support its warfighters and maintain strategic advantage [1][3].

Alphabet's stock has a consensus Strong Buy rating among analysts, with a target price of $202.24, implying a 12.24% upside from current levels. The company's recent deal with AI-coding startup Windsurf further underscores the growing importance of AI coding assistants in the tech industry [4][5].

References:
[1] https://finance.yahoo.com/news/us-department-defense-awards-contracts-161145631.html
[2] https://www.marketscreener.com/quote/stock/ALPHABET-INC-24203373/news/US-Department-of-Defense-awards-contracts-to-Google-xAI-50503875/
[3] https://www.cnbc.com/2025/07/14/anthropic-google-openai-xai-granted-up-to-200-million-from-dod.html
[4] https://www.morningstar.com/news/marketwatch/2025071453/alphabets-latest-deal-reveals-the-hottest-area-of-ai-right-now
[5] https://www.marketwatch.com/story/alphabets-latest-deal-reveals-the-hottest-area-of-ai-right-now-19e162aa