Key Takeaways
- Alphabet shares closed Thursday at $280.92, declining 3.4% to reach the lowest level since November 2025 following a jury verdict requiring Google and Meta to pay $6 million in a social media addiction case
- The stock decreased an additional 1.2% on Friday, ending at $277.70 and extending weekly losses beyond 7%
- Wells Fargo upgraded its Alphabet price target from $387 to $397 while keeping its Overweight rating
- The firm highlighted tensor processing unit chip licensing to Anthropic and the $32 billion Wiz purchase as significant growth catalysts
- Wells Fargo analyst Ken Gawrelski stated Alphabet possesses all required components to succeed in artificial intelligence
Alphabet experienced a 3.4% decline on Thursday, ending the session at $280.92 — marking the company’s weakest closing price since November 14, 2025, according to Dow Jones Market Data. Friday brought additional selling pressure, with shares retreating 1.2% to finish at $277.70.
The Thursday selloff followed a jury decision against Google’s YouTube platform and Meta in legal proceedings initiated by a plaintiff who claimed both companies engineered their platforms to create addictive user experiences. The jury awarded the plaintiff $6 million in damages from the two technology giants. Meta experienced a nearly 8% decline Thursday and continued falling 1.5% Friday to reach $539.20.
The week’s trading activity leaves Alphabet positioned for a weekly decline exceeding 7%.
Wells Fargo released an optimistic research note Friday morning despite ongoing market pressure. The financial institution increased its Alphabet price objective to $397 from the previous $387 target while maintaining its Overweight recommendation. This updated target implies potential appreciation of 41% from Thursday’s closing price.
Analyst Identifies Emerging Revenue Opportunities
Analyst Ken Gawrelski authored the note, explaining that Google is “leveraging its compute capacity advantage to develop new profit pools.”
The Wells Fargo team highlighted two strategic initiatives. Google’s decision to license its tensor processing unit chips — commonly called TPUs — to Anthropic represents the first major development. The second involves Alphabet’s $32 billion cash transaction to acquire cloud security company Wiz, which finalized on March 11.
Wells Fargo projects TPU licensing will contribute 4% to Google Cloud Platform revenue during 2026, expanding to 7% in 2027. For operating income, the bank forecasts a 6% increase in 2026 and 14% growth in 2027. The Wiz transaction is anticipated to deliver substantial additional contributions.
Gawrelski noted growing confidence regarding “Google’s competitive position in search, given progress with AI mode and Gemini adoption.”
Wells Fargo: Alphabet Positioned for AI Leadership
The Wells Fargo research team emphasized that Alphabet “has all the pieces necessary to be an AI winner.”
This assessment carries particular significance considering the competitive challenges Google Search has encountered from AI-driven alternatives throughout the past year.
Alphabet shares currently trade more than 17% below their 52-week peak. According to the Wells Fargo analysis, the present stock price represents a substantial discount relative to the firm’s valuation assessment.
