Alphabet's shares fell 3.3% in after-hours trading on July 23, erasing roughly $138 billion in market cap, even as multiple Wall Street analysts raised their price targets on GOOGL following the company's second-quarter report. The trigger was simple: earnings per share came in at $2.85 against the $2.89 the market had penciled in.
Barclays moved its target from $405 to $425, keeping an "Overweight" rating. The bank's analysts pointed to solid AI positioning across the stack, from consumer-facing products like Search and Gemini all the way down to underlying model infrastructure. That said, they trimmed EPS estimates for Q4 and Q1 2027, and cut their free cash flow forecast to account for capital expenditures that came in higher than expected. The spending surge is real: Alphabet is burning through cash to keep pace with Anthropic, OpenAI, and AWS, and Barclays isn't pretending otherwise.
Cloud carried the quarter
Evercore ISI held its $420 target and "Outperform" rating. Analyst Mark Mahaney put it plainly: the bar was high, and Alphabet mostly cleared it. The standout number was Google Cloud, which posted 82% revenue growth and a record 36% operating margin. Mahaney called it "a positive read-through for the AI Trade." Evercore did raise revenue and operating income estimates, but also widened its 2027 free cash flow loss projection from $20 billion to $50 billion, reflecting the company's upgraded capex guidance.
The disconnect between analyst confidence and the after-hours sell-off is straightforward: institutions can see a long-term AI infrastructure story and still punish a two-cent EPS miss on the same evening. Alphabet's management flagged that AI adoption could accelerate the monetization curve in coming quarters, but that argument does little for a trader watching the per-share line fall short.
This article is for informational purposes only and does not constitute financial advice or an investment recommendation.
