Alphabet Inc. Receives Upgrade from Wells Fargo Due to AI Infrastructure Superiority
Wells Fargo has upgraded Alphabet Inc. (GOOGL) to ‘Overweight’ from ‘Equal Weight’ on Monday, February 23, 2026. The firm has raised its price target from $354 to $387, signaling a potential upside of more than 22% from Friday’s close.
The upgrade is centered around three critical competitive advantages that analyst Ken Gawrelski identifies for Alphabet’s AI market leadership. These are:
- Customer data
- Distribution capabilities
- Computing capacity
Wells Fargo projects that Google will expand its AI compute capacity to 35 gigawatts by 2028 from 15 gigawatts at the end of 2025. This expansion will further extend its capacity lead over other hyperscaler peers.
The firm has significantly raised its Google Cloud Platform (GCP) forecasts. It now expects 60% year-over-year revenue growth in 2026, which is 11% above Wall Street consensus. For 2027 and 2028, Wells Fargo projects growth of 42% and 28% respectively, running 16% and 12% above consensus estimates. The analyst also projects that Gemini’s average recurring revenue will triple to $12 billion by the end of 2027 from $4 billion at the end of last year.
Following the upgrade, Alphabet shares climbed 0.5% in premarket trading. The company plans to spend between $175 billion and $185 billion on capital expenditures in 2026. This is nearly double the $91 billion spent in 2025, as it races to maintain its AI infrastructure advantage.
Source: CNBC