Key Highlights
- Alphabet shares declined 3.4% on Thursday, settling at $280.92—the lowest closing price since mid-November 2025 following a jury decision requiring Google and Meta to pay $6 million in an addiction-related case
- The tech giant’s stock continued its descent Friday, dropping another 1.2% to $277.70, marking a weekly loss exceeding 7%
- Wells Fargo upgraded its price objective for Alphabet from $387 to $397 while reaffirming its Overweight stance
- The financial institution highlighted TPU processor licensing deals with Anthropic and the $32 billion Wiz takeover as emerging growth catalysts
- Wells Fargo’s Ken Gawrelski stated that Alphabet “has all the pieces necessary to be an AI winner”
Alphabet experienced a 3.4% decline on Thursday, ending trading at $280.92—marking its weakest closing position since November 14, 2025, according to Dow Jones Market Data. The downward trend persisted Friday with an additional 1.2% slide to $277.70.
Thursday’s selloff followed a jury verdict against Google’s YouTube and Meta in litigation filed by a plaintiff who alleged both technology platforms engineered their applications to foster addictive behavior. The jury awarded $6 million in damages to the complainant. Meta’s shares plummeted nearly 8% Thursday and extended losses with a 1.5% decline Friday to $539.20.
The market reaction positions Alphabet for a weekly decline surpassing 7%.
Countering the negative sentiment, Wells Fargo issued an optimistic research report Friday morning. The institution elevated its price forecast for Alphabet to $397 from its previous $387 level, maintaining its Overweight recommendation. This revised target suggests potential appreciation of 41% from Thursday’s closing figure.
Wall Street Firm Highlights Emerging Revenue Opportunities
The analysis, authored by Ken Gawrelski, emphasized that Google is “leveraging its compute capacity advantage to develop new profit pools.”
The Wells Fargo team identified two strategic initiatives as particularly significant. First, Google’s decision to license its tensor processing unit technology—commonly referred to as TPUs—to Anthropic. Second, Alphabet’s $32 billion all-cash purchase of cybersecurity provider Wiz, which was finalized on March 11.
Wells Fargo projects that TPU licensing arrangements will contribute an additional 4% to Google Cloud Platform revenues during 2026, expanding to 7% in 2027. From an operating income perspective, the firm anticipates a 6% enhancement in 2026 and 14% in 2027. The Wiz transaction is forecasted to deliver substantial incremental benefits beyond these figures.
Gawrelski noted he’s “more comfortable with Google’s competitive position in search, given progress with AI mode and Gemini adoption.”
Wall Street Voice: Google Positioned for AI Leadership
The Wells Fargo research team emphasized that Alphabet “has all the pieces necessary to be an AI winner.”
This assertion carries particular weight considering the competitive challenges Google Search has encountered from AI-driven alternatives throughout the previous twelve months.
Alphabet’s equity now trades more than 17% below its 52-week peak. According to Wells Fargo’s assessment, current market pricing represents a considerable discount relative to the firm’s valuation model.
