The Cloud Computing business doesn't get the respect it deserves, according to Baird Equity Research.
Bakhistorien. Alphabet's shares (ticker: GOOGL) have risen about 18% this year. In July, the company reported quarterly better than expected sales revenue growth compared to the previous quarter. Alphabet also announced a buyback approval for a further $ 25 billion at that time.
What's new. Baird analyst Colin Sebastian reaffirmed their Outperform rating for Alphabet stock on Friday.
"We do not think Google Cloud valuation is fully embedded in Alphabet's shares," he wrote. "Channel contacts suggest that GCP
Alphabet shares were down 0.7% to $ 1,229.84 on Friday.
The analyst said Google's capabilities for artificial intelligence and machine learning are attracting developers to its cloud platform. He predicts GCP and cloud services (G-Suite) will generate $ 11 billion in revenue next year, giving it an estimated valuation of $ 100 billion, according to his analysis.
Looking ahead. Sebastian raised the alphabet price target to $ 1,400 from $ 1,360.
Write to Tae Kim at email@example.com