GOOGL: Wedbush Calls Alphabet a 'Top Pick' in Internet

An Alphabet (GOOG, GOOGL) stock bull has reiterated its optimism for the Internet name and called it the top mega-cap pick in the industry because of its artificial intelligence (AI) leadership.

On Thursday, July 16, Wedbush analysts Ygal Arounian and Chase Tohanczyn assumed and initiated coverage on a group of companies across the internet sector. In the report, they reiterated the firm's Outperform rating on the company and called it the "best-positioned full stack AI offering for [the] next era of internet and technology.

It's another boon for the search giant, which has climbed by 17% this year, outperforming both the S&P 500 and the communication services sector.

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The Case for GOOGL Stock

Here's a look at some of the pillars of Arounian and Tohanczyn's opinion:

The full stack setup: Arounian and Tohanczyn say that "Alphabet has the most complete ownership of the consumer distribution layer (Search, Android, Chrome, YouTube), model (Gemini), custom silicon (TPUs), and cloud infrastructure (GCP), at scale."

Gemini: Gemini is natively embedded across 13 Google products with more than a billion users each, five of which have 3 billion users (Search, Android, YouTube, Gmail, Workspace). Gemini monthly active users surpassed 900 million in May, up from 750 million in February.

Search and AI are merging: AI overviews have 2.5 billion MAUs and are driving better engagement, Google says. AI Overviews monetizes at a similar rate to traditional search, pushing back on cannibalization concerns (at least in the near term).

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YouTube remains strong: YouTube is now the most-watched streaming platform on U.S. TVs. YouTube Premium/YouTube TV subscriptions are growing rapidly, part of 350 million total paid subscriptions across Google's consumer products. YouTube Shorts reaches 200 billion daily views.

Agentic commerce will eventually emerge: Google sees agentic commerce as a long-term opportunity spanning not just ads but transaction/payment take rates, cloud, and AI model adoption. The Universal Commerce Protocol (UCP) lets AI agents communicate with merchant systems across discovery, inventory, price comparison, checkout, and post-purchase tracking.

Google Cloud strength: Google Cloud grew 93% in 1Q26, which was faster than both Microsoft's (MSFT) Azure at 40% and Amazon's (AMZN) Amazon Web Services at 28%.

The pair currently have a $445 price target on the stock, which is roughly 25 times 2027 earnings per share (EPS) estimates and translates into 20% upside from current levels.

Other Analyst Opinions on Alphabet

GOOGL stock is extremely well-regarded by Wall Street's analyst community. According to data from S&P Global Market Intelligence, the company currently enjoys 57 Buy-equivalent ratings versus just seven Holds and not a single Sell. That's driven by their views for long-term (the next three to five years) annual earnings growth, which currently sit at 16% on average. A mean price target of $433.14 implies 17% upside over the next 12 months.

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Angelo Zino, analyst at independent research firm CFRA, recently reiterated a Buy call on Alphabet ahead of the company's July 22 earnings report and raised his EPS targets. He now sees the company earnings $14.29 per share in 2026 and $14.97 in 2027, up from $14.25 and $14.09, respectively.

"Consensus calls for ~$114B in revenue (~17% Y/Y) and EPS of ~$2.88, both of which we expect GOOGL to beat," he says. "We look for Cloud sales of +55%-60%, though a Wiz margin drag and an FX tailwind shrinking from ~3pts to ~1pt introduce headwinds; sustainability of Cloud's record 33% operating margin in the low-to-mid 30s will be closely watched. In Search, we see 17%-18% Y/Y growth, with YouTube in the low teens."

Truist Managing Director Youssef Squali also recently reiterated his Buy call and $430 target on shares.

"We believe Alphabet is one of the best plays on several macro trends in the economy, including the shift to digital advertising, both for direct response and for brands; increased consumption of video; rise of cloud computing, in addition to several long-term initiatives including self-driving cars (Waymo)," he says. "Despite leaning more heavily into AI investments, recent cost-cutting initiatives have significantly improved margins for the company. We believe macro pressures and regulatory concerns in the short- and medium-term are important considerations to keep in mind."

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