BofA Securities increased its price target on Alphabet (NASDAQ: GOOGL) to $280 from $252 while maintaining a Buy rating, with shares up more than 1% intra-day Monday. The firm expected third-quarter results on 10/29 and said checks pointed to ad spend tracking ahead of expectations, supported by a better macro backdrop, greater data usage, and incremental spending to offset organic search traffic declines.
BofA lifted revenue above Street projections and also raised expenses to reflect roughly $3.9 billion in legal charges. It now expected third-quarter revenue/EPS of $86.0 billion/$2.17 versus consensus at $85.0 billion/$2.29. The Street was at 11% search growth; BofA estimated a stable year-over-year pace around 12%. Operating expenses were modeled at $29.6 billion, with operating margin down 259 basis points to 35.7%—but improving year over year when excluding one-time legal costs.
The analysts anticipated another strong quarter from Search with stable paid-click trends, arguing better macro-driven results could ease investor concerns about AI-related disruption and support multiple expansion. Management was also expected to highlight momentum in Gemini usage. On Google Cloud, recent wins could bolster backlog growth, and BofA remained constructive on the unit’s growing contribution to Alphabet’s overall value.
