"Alphabet stock jumped 3% through 11:10 a.m. ET this morning, and the major catalyst behind the move was this: As TheFly.com reports today, Citi raised its price target on Alphabet stock to $280 a share, a 24% increase that implies the stock could rise another 12% over the next 12 months. And why did Citi do this? Because artificial intelligence (AI), that's why."
"According to data from S&P Global Market Intelligence, since OpenAI released ChatGPT in late 2022, Alphabet's capital spending (on chips and server farms and other AI infrastructure, primarily) has more than doubled. Over the last 12 months, Alphabet's spent a staggering $67 billion on capital expenditures, such that today, roughly half the company's operating cash flow is immediately consumed by capex."
Alphabet stock reached a $3 trillion market capitalization for the first time. Citi raised its price target to $280, a 24% increase that implies roughly 12% upside over the next year, citing AI and greater regulatory clarity and expecting Gemini to be rolled across advertising and cloud businesses. Capital spending has more than doubled since late 2022, with about $67 billion spent over the last 12 months and roughly half of operating cash flow consumed by capex. Free cash flow grew only 11% over three years, making Alphabet harder to classify as a growth stock currently.
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