Phillip Securities Upgrades Google Stock to Buy Amid AI Momentum
Following Alphabet’s Q2 earnings report on July 22, which saw a significant drop in its stock price due to negative free cash flow and high capital expenditure guidance for $195 billion–$205 billion, Phillip Securities analyst Serena Lim Yi Qi upgraded the company's rating from Accumulate to Buy. The upgrade reflects confidence in Alphabet’s vertically integrated AI ecosystem, including custom silicon (Tensor Processing Units), optimized data centers, and Gemini models across its product suite. Lim also lowered her price target for GOOG stock to $425 from $450 due to revised revenue and net income forecasts, citing ongoing supply chain constraints affecting hardware margins. Despite the lower target, she emphasized that Alphabet’s long-term growth potential remains strong, supported by surging demand in Google Cloud (82% YoY) and resilient advertising revenue (14% YoY). The stock currently trades at a P/E of 16.04 with an exceptionally low PEG ratio of 0.14. The analyst views the negative free cash flow as temporary, driven by aggressive AI investments rather than structural issues.
Tickers: $GOOG
Topics: AI growth Alphabet Capital expenditure Free cash flow GOOG stock