Alphabet Leverages TPUs and Gemini for AI Growth, Projected $13 Billion Revenue by 2028

Written by Emily J. Thompson, Senior Investment Analyst

GOOGL+0.02%

GOOG-0.18%

Source: Fool

Updated: 1h ago

0mins

Source: Fool

Market Dominance: Alphabet's Chrome browser and Android operating system each hold over 70% market share, and despite facing an antitrust case, it retains its exclusive search revenue-sharing deal with Apple, thereby solidifying its distribution advantage globally.
AI Innovation Acceleration: The introduction of ChatGPT has accelerated the development of Alphabet's Gemini large language model, which is expected to drive query and revenue growth, further cementing its leadership position in the AI sector.
TPU Competitive Advantage: Alphabet's custom TPU chips demonstrate a lower cost for training and running AI workloads compared to Nvidia's GPUs, with projections indicating it will rent out 7 million TPUs by 2028, generating approximately $13 billion in annual revenue, creating a robust profit model.
Vertical Integration Strategy: Alphabet's acquisition of cybersecurity firm Wiz and energy infrastructure company Intersect enhances its tech stack's completeness, ensuring necessary power supply for data center expansion, thereby boosting its competitiveness in the AI market.

GOOGL

$313.56+Infinity%1D

Analyst Views on GOOGL

Wall Street analysts forecast GOOGL stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOGL is 312.00 USD with a low forecast of 236.00 USD and a high forecast of 350.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

38 Analyst Rating

31 Buy

7 Hold

0 Sell

Strong Buy

Current: 313.510

Low

236.00

Averages

312.00

High

350.00

Current: 313.510

Low

236.00

Averages

312.00

High

350.00

Needham

Buy

maintain

$300

2025-12-23

Reason

Needham

Price Target

$300

2025-12-23

maintain

Buy

Reason

Needham keeps a Buy rating and $300 price target on Reddit (RDDT) but names the stock its 2026 Top Pick and adds it to the firm's "Conviction Buy" list, replacing Roku (ROKU). The firm is positive on the company having 100% human-created content, which optimizes trust, authenticity, and value to LLMs, the analyst tells investors in a research note, further stating that Reddit is already generating over $100M per year in fees from OpenAI and Google's (GOOGL) Gemini, and this "could double" with Anthropic and Perplexity fees. Needham also notes that Reddit is the fastest growing company in its coverage, while its Performance Ads give the company "full-funnel ad solutions" and a larger share of ad budgets.

Roth Capital

Buy

maintain

$60

2025-12-23

Reason

Roth Capital

Price Target

$60

2025-12-23

maintain

Buy

Reason

Roth Capital keeps a Buy rating and $60 price target on Hut 8 (HUT). The company has signed one of the more favorable high-performance-compute lease agreements announced, with 245MW capacity to Fluidstack valued at $7B and 97% operating margins, including a full backstop from Google (GOOGL), and its improved economics and backstop have positioned Hut 8 to secure more favorable project financing term, the analyst tells investors in a research note. Combined with construction partners and Fluidstack's optionality on behalf of Anthropic, this enables Hut 8 to scale its power portfolio to more than 2GW, the firm added.

Citi

Buy

maintain

$343 -> $350

2025-12-22

Reason

Citi

Price Target

$343 -> $350

2025-12-22

maintain

Buy

Reason

Citi raised the firm's price target on Alphabet (GOOGL) to $350 from $343 and keeps a Buy rating on the shares as part of its 2026 outlook for the North America internet group. The firm says Alphabet's "industry leading" artificial intelligence tools should drive search revenue growth and accelerating cloud sales. Alphabet is a top pick for Citi entering 2026.

Wedbush

Scott Devitt

Outperform

maintain

$320 -> $350

2025-12-19

Reason

Wedbush

Scott Devitt

Price Target

$320 -> $350

2025-12-19

maintain

Outperform

Reason

Wedbush analyst Scott Devitt raised the firm's price target on Alphabet to $350 from $320 and keeps an Outperform rating on the shares. Consumer internet companies delivered strong returns in 2025, averaging 23% across 24 covered companies versus 19% for the NASDAQ, the analyst tells investors in a research note. In 2026, performance is expected to diverge as investors weigh factors such as AV disruption, AI monetization, ongoing investment cycles, and growing adoption of agentic AI, the firm says.

About GOOGL

Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.