Alphabet Inc.

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Bullish +62

Alphabet (GOOGL) Stock: Piper Sandler Projects TPU Chip Revenue to Surge to $104B by 2028

Analyst upgrade Chip design win Earnings report AI-generated analysis

πŸ“ˆ Piper Sandler analyst Thomas Champion raised the GOOGL price target to $400 from $395 while maintaining an Overweight rating.

πŸ’» External TPU chip revenue is projected to surge to $104 billion annually by 2028 following recent public disclosure of sales figures.

πŸ—οΈ Operational TPU capacity is expected to expand from 3 gigawatts in late 2027 to 6 gigawatts by December 2028.

☁️ The 2027 Cloud division revenue forecast stands at $204 billion, exceeding Wall Street consensus estimates by 15-17%.

πŸ“Š Alphabet's Q2 2026 earnings beat expectations with $9.11 EPS and total revenue of $119.80 billion.

πŸ”‹ The financial model assumes a 30% operating margin for TPU hardware sales, aligning with current business segment structures.

πŸ“‰ GOOGL stock declined approximately 1% in premarket trading to hover around $341.60 despite the positive analyst update.

🀝 Broadcom executives referenced Anthropic's infrastructure needs, providing context for the semiconductor market landscape.

πŸ›οΈ The consensus Wall Street price target is currently $419.93, which remains higher than Piper Sandler's new $400 target.

πŸ“‰ Goldman Sachs adjusted its GOOGL price objective downward to $435 while preserving its buy recommendation.

Bullish Signals
  • Piper Sandler analyst Thomas Champion raised the GOOGL price target to $400 from $395, maintaining an Overweight rating.
  • External TPU chip revenue is projected to surge to $104 billion annually by 2028 following recent public disclosure of sales figures.
  • The 2027 Cloud division revenue forecast stands at $204 billion, exceeding Wall Street consensus estimates by 15-17%.
  • Alphabet's Q2 2026 earnings beat expectations with $9.11 EPS and total revenue of $119.80 billion.
  • Operational TPU capacity is expected to expand significantly, reaching 6 gigawatts by December 2028.
Risk Factors
  • GOOGL stock declined approximately 1% in premarket trading to hover around $341.60 amid broader technology sector selling pressure.
  • Goldman Sachs adjusted its GOOGL price objective downward to $435 from $440, though it preserved its buy recommendation.
Full Analysis
Piper Sandler analyst Thomas Champion has raised his price target for Alphabet (GOOGL) to $400 from $395, maintaining an Overweight rating. The upgrade is driven by a revised financial model projecting substantial growth in the company's external Tensor Processing Unit (TPU) chip business, which is expected to generate $104 billion in annual revenue by 2028. Alphabet recently disclosed its first-ever public figures for external TPU sales during its Q2 2026 earnings report. Champion's model anticipates TPU sales accelerating from approximately $8 billion in 2026 to $51 billion in 2027, supported by a planned expansion of operational capacity to 6 gigawatts by late 2028. The investment firm forecasts Alphabet's Cloud division revenue to reach $204 billion in 2027, significantly exceeding Wall Street consensus estimates. This projection includes $51 billion attributed specifically to TPU chip sales, with the firm noting that its own EBIT projections for 2027 and 2028 are likely conservative compared to actual potential performance. Despite the optimistic analyst update, Alphabet stock declined roughly 1% in premarket trading near $341.60 amid broader technology sector selling pressure. The company recently reported robust quarterly results with earnings of $9.11 per share and total revenue of $119.80 billion, both surpassing analyst expectations.