Bank of America resets Google stock forecast post-earnings

Bank of America didn’t exactly blink after Google-parent Alphabet’s (GOOGL) reported its Q4 2025 earnings, but it did reset the math.

In a post-earnings note, BofA reiterated its Buy rating on Google stock, while keeping a  $370 price target and lifting forecasts across the board.

For perspective, Google stock is currently trading at $331.25; so that $370 target implies about 11.7% upside. Interestingly, other major analysts raised their price targets meaningfully, with BofA’s being the most conservative.

• Forecast reset: BofA bumped 2026 net revenue estimates by 2% and 2026 EPS by 1% following the quarter.
• Longer-term lift: The firm raised 2027 EPS to $12.92 from $12.63, with 2028 estimates moving higher as well.
• Valuation tweak: Despite the upgrades, BofA trimmed its multiple to 27x from 28x, on the back of a broader multiple compression across Big Tech.

The note lands at an inopportune time for Google and Big Tech in general.

Google stock shed over 5% after the management guided FY26 capex of $175 billion to $185 billion. According to Investopedia, the rout wiped out nearly $170 billion in market value in an immediate reaction.

That tanking didn’t happen in a vacuum, though. 

In fact, according to data compiled by The Kobeissi Letter, cited by Seeking Alpha, the Magnificent Seven have lost roughly $3 trillion in total market cap from their record highs.

However, veteran tech analyst Dan Ives said it was a moment to pounce in a CNBC interview cited by Seeking Alpha.

Alphabet’s quarter, though, came in hot, with beats on revenue and earnings, backed by accelerating Search engagement and surging Cloud demand.

BofA analysts acknowledged the robust quarterly showing and feel that, despite the near-term headache from heavy capex, it reinforces Google’s position as perhaps the most durable AI beneficiary.

Wall Street’s biggest Alphabet price targets right now

• Canaccord: $415 (+25.4%).
• Evercore ISI: $400 (+20.8%).
• Needham: $400 (+20.8%).
• Goldman Sachs: $400 (+20.8%).
• JPMorgan: $395 (+19.3%).
  Sources: Tipranks, Investing

Google’s Q4 2025 scorecard

Google wrapped another solid quarter, beating estimates across both lines by a comfortable margin.

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For context, the tech giant has exceeded Wall Street estimates for both sales and earnings in each of the past 4 quarters.

A quick caveat: the numbers are taken from BofA’s note, and the revenue/EPS framing isn’t apples-to-apples with the earnings release, reflecting an adjusted metric.

• Top-line / bottom-line: Q4 net revenue $97.2 billion vs Street $95.2 billion; GAAP EPS $2.82 vs $2.64.
• What drove the beat: Search revenue $63.1 billion, up 17% year-over-year, topping Street $61.3 billion; Google Cloud revenue $17.7 billion, up 48%, beating Street $16.3 billion.
• Standouts (and offsets): Other income $3.2 billion vs Street $0.9 billion, offsetting a one-time $2.1 billion Waymo-related charge.
• Cash/cash flow/buybacks: Year-end cash & equivalents $30.7 billion; Alphabet bought back $5.5 billion of stock in Q4 (total $45.7 billion in 2025).
• Guidance: FY26 capex guided to $175 billion–$185 billion to accelerate AI/data center buildout; Cloud backlog ended Q4 at $240 billion.
  Source: BofA Global Research, Alphabet post-earnings note (Feb. 5, 2026).

Why Bank of America still likes Google stock

BofA analysts feel that, instead of AI hollowing out Google’s core businesses, it is making them into an even bigger behemoth. 

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First up, Search is accelerating, not eroding, with AI tools changing how people ask questions. 

Google’s management pointed to record search usage, with AI now driving longer, more complex queries and follow-up questions. Over time, this behavior is expanding the monetizable surface area, particularly as Google dabbles in ads within AI-driven results and new “AI Mode” formats. 

Secondly, Gemini has evolved into much more than just a chatbot.

BofA effectively frames it as a potent distribution platform with immense scale (nearly 750 million monthly active users) across apps and integrations. 

That matters a ton because it creates several future levers, including subscriptions, enterprise tools, and eventually advertising. 

Moreover, Cloud continues to impress and has effectively become Google’s second growth engine. 

BofA pointed to a mighty impressive 55% quarter-over-quarter jump in Cloud backlog, underscoring robust customer demand for AI workloads. The implication is that as more data centers come online, sales growth will follow in tandem.

Finally, BofA addressed the capex argument, saying that the spending surge is a high-ROI infrastructure investment.

The firm believes Google is spending aggressively in catering to tangible demand that, over time, reinforces margins and top-line growth instead of undermining its fundementals.

What could go wrong for Google bulls?

BofA’s thesis on Google stock is mostly bullish, but its analysts haven’t turned a blind eye to things that could easily go the other way.

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Perhaps the most obvious tension is the surge in AI spending.

Google talked about a whopping $175 billion to $185 billion in capex for FY26, and that buildout usually doesn’t just impact a specific line item.

To be fair, Google’s not the only tech giant that’s reported massive capex numbers of late.

• Meta Platforms: expects 2026 capex of $115 billion–$135 billion, spearheaded by stepped-up AI infrastructure investment.
• Microsoft (MSFT): didn’t offer a clean full-year FY26 capex range but revealed a Q2 FY26 capex of $37.5 billion. If we annualize that figure, it implies a whopping $150 billion run-rate.
• Amazon: expects to invest about $200 billion in capex in 2026, mainly linked to AWS/AI infrastructure. 

As a chartered accountant, I’ll state the obvious in that depreciation spreads costs over time, and if sales growth lags, margins and free cash flow pay a heavy price.

On top of that, there’s the competitive wildcard to consider.

Particularly in search, if AI alternatives continue to improve and find ways to monetize their offerings (OpenAI-style ad ramp), things could get complicated for Google’s cash cow.

BofA also flags more structural issues, including sluggish payoffs from layering LLMs into production, as well as regulatory hiccups, such as Europe’s DMA, that could dent monetization.

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