Analysts covering Alphabet are getting more excited about the 2026 outlook for the stock as data show artificial intelligence is making Google's search tools more useful.
Citizens analyst Andrew Boone raised his price target for Alphabet on Wednesday to $385 from $340. That implies a 22% increase from the closing price of $313.85 on Tuesday.
"We view AI search as a tailwind near term for query growth," Boone wrote in a research note. "Importantly, the incorporation of updated models is improving the relevance of answers, which we view as a further tailwind to engagement."
Other analysts have also recently shared positive outlooks on Google's search performance, citing the inclusions of tools like AI Mode and Overviews, and following the launch of Gemini 3, Alphabet's latest AI model.
TD Cowen analyst John Blackledge rates Alphabet as a Buy with a $350 price target. He wrote on Dec. 12 that he has seen continued increases in search engagement driven by usage of AI Mode and Overviews, and that an increasing share of ChatGPT users are also using Gemini.
Evercore ISI analyst Mark Mahaney rates the stock at Outperform with a $325 price target. He wrote on Dec. 11 that AI innovations are creating a better search experience for users, which should translate into "consistently robust search revenue growth."
The flurry of optimism represents a comeback of sorts. Alphabet stock hit a 52-week closing low of $144.70 on April 8.
While the overall market was plunging in response to worry about President Donald Trump's plans for tariffs, concerns specific to the company weighed on the stock, too. Investors were worried about regulatory risks and increasing spending on AI infrastructure, as well as growing competition in search from AI models such as ChatGPT and Perplexity.
Wall Street's perspective has changed. Boone wrote that Google usage is "holding relatively constant, despite the growing usage of AI search."
"Given the rollout of AI Overviews and AI Mode to cover more categories of search across more geographies, we believe Google has a multi-year tailwind for query growth," he wrote. "Explaining this, we believe AI Overviews and AI Mode allow users to ask more complex questions while answers at the top of search more easily offer the information that users are looking for, creating a better experience."
Google stock is now up 66% this year, on pace for its best year since 2009, according to Dow Jones Market Data.
The stock has become more expensive as optimism grows. Shares are now trading at 27.9 times the earnings expected over the next 12 months, compared with the five-year average of 21.7 times.
