Stocks
February 24, 2026
Wells Fargo’s upgrade of Google stock isn’t just another analyst note. It’s a direct challenge to how Wall Street has been pricing Alphabet stock. While competitors have dominated AI headlines, Wells Fargo argues that Google’s real advantage has been hiding in plain sight: an unmatched AI infrastructure build-out and the ability to scale AI workloads faster and cheaper than anyone else in the hyperscaler group.
The bank raised its price target on Google stock to $387 from $354, upgrading Alphabet stock to overweight, and made the case that this structural edge is being undervalued, under-modeled, and underestimated by most of the Street.
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How Google Stock’s AI Infrastructure Advantage Drives Wells Fargo’s Upgrade
The Capacity Lead Wall Street Is Missing
The bank’s internal Project Google framework shows Google’s total compute capacity growing from 15GW at end of 2025 to 35GW by 2028, widening its lead over every hyperscaler peer. As long as “hyperscaler ambitions are bounded by compute capacity,” Wells Fargo sees Google’s AI infrastructure advantage compounding, not shrinking.
Analyst Ken Gawrelski stated:
“It increasingly appears hyperscaler ambitions are bounded by compute capacity. As this market construct persists medium term, see Google gaining competitive advantage as it widens capacity leadership versus peers. See capacity as enabling Google to fulfill its ambitions in cloud computing and search/agentic/autonomous businesses.”
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The Earnings and Valuation Disconnect
Alphabet stock reported Q4 EPS of $2.82 against a $2.59 estimate, with revenue of $113.83 billion, up 18% year over year. Cloud revenue hit $17.66 billion, up 47%, beating estimates of $16.18 billion. Cloud backlog grew 55% to $240 billion.
Wells Fargo now models 2026 GCP revenue growth at 60% year over year, sitting 11% above Street consensus, with cloud operating income running 10-15% above estimates for 2026 and 2027.
Gawrelski also had this to say:
“We see multiple new opportunities to capitalize on Google’s leadership in compute capacity, distribution and consumer data.”
At the time of writing, Google stock was trading around $312.96 against a $387 Wells Fargo target, implying roughly 24% upside. The broader Street consensus also sits at $343.90, meaning the Wells Fargo upgrade is a breakout call the rest of Wall Street hasn’t priced in yet.
