Google Cloud Revenue Surges: Alphabet Focuses on $100 Billion TPU Opportunity Ahead of Q3 Earnings
I'm LongbridgeAI, I can summarize articles.Alphabet stock faced pressure due to heavy AI spending and cloud competition ahead of Q3 earnings. Analysts remain bullish: Bank of America forecasts strong cloud growth, BNP Paribas sees a $100B TPU opportunity, and Jefferies highlights Gemini's pricing advantage. Alphabet is expected to report EPS of $3.02 and revenue of $128.2B on Oct 28, with a consensus Buy rating.
Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) stock remained under pressure Friday after falling about 3% Thursday in the morning as investors weighed AI infrastructure constraints, heavy capital spending and intensifying cloud competition ahead of third-quarter earnings.
The stock has gained single digits in 2026, driven by remarkable infrastructure spending and cash flow pressure.
CEO Sundar Pichai said Google Cloud is prioritizing limited computing capacity for internal DeepMind models, raising concerns that some commercial customers could shift workloads to rivals.
Investors are also watching Alphabet’s projected $195 billion-$205 billion in 2026 capital expenditures as the company expands AI and data-center capacity.
• What’s the outlook for GOOGL shares?
Bank Of America Sees Cloud Upside
Bank of America Securities analyst Justin Post maintained a Buy rating and a $340 price forecast.
Post forecasts third-quarter revenue of $111.4 billion and GAAP EPS of $3.07, both above Street expectations. He expects Google Cloud revenue to grow 93%, compared with the 89% consensus, supported by additional capacity and TPU sales.
He estimates 2026 capital expenditure at roughly $200 billion and 2027 spending near $300 billion, with upside risk.
BNP Paribas Sees $100 Billion TPU Opportunity
BNP Paribas analyst Nick Jones maintained an Outperform rating and raised his price forecast to $450 from $420.
Jones estimates external TPU commitments could generate $80 billion-$100 billion in cumulative revenue through 2028.
He forecasts more than $4 billion in TPU revenue in 2026, over $40 billion in 2027 and more than $30 billion in 2028. Jones cautioned that TPU sales could pressure Cloud margins near term while still adding to operating income.
Jefferies Highlights Gemini Pricing Advantage
Jefferies analyst Brent Thill called Gemini 4 Argon "a great step in the right direction."
Thill said Argon’s pricing, roughly 50% below some competing models, could force rivals to respond. He also sees Google’s broader ecosystem across applications, data and infrastructure as an advantage beyond individual model performance.
Earnings And Analyst Outlook
Alphabet is scheduled to report earnings on Oct. 28.
Analysts expect EPS of $3.02, up from $2.87 a year earlier, and revenue of $128.20 billion, up from $102.35 billion.
Alphabet carries a Buy consensus rating with an average price forecast of $428.28.
Citizens maintained Market Outperform and lowered its forecast to $450 on Oct. 22. BMO Capital maintained Outperform and raised its forecast to $480, while KeyBanc maintained Overweight and lowered its forecast to $410.
Top ETF Exposure
The MicroSectors FANG+ 3x Leveraged ETN (NYSE:FNGU), Fidelity Fundamental Large Cap Growth ETF (NASDAQ:FFLG) and MicroSectors FANG+ ETNs (NYSE:FNGS) each carry a 9.67% weighting in Alphabet.
Significant flows into or out of these funds can translate into corresponding trading activity in Alphabet shares.
GOOGL Price Action: Alphabet shares were down 0.26% at $323.19 on Friday at publication, according to Benzinga Pro data.
Image via Shutterstock
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