TD Cowen lowers Alphabet's PT over Google Cloud revenue efficiency concerns
TD Cowen cuts PT on Alphabet GOOGL.O to $210 from $220, citing lower Google Cloud revenue efficiency compared to expected Gen AI gains
Brokerage's current price target represents 29% upside from the Google parent's last close
GOOGL shares up ~1.2% at $164.68 in premarket trading
"Given significant AI-related capex acceleration in '24 and '25, we expect that incremental Gen AI revenue to capex will emerge from low levels in '26"- TD Cowen
Alphabet plans to spend $16 billion to $18 billion in the first quarter, with focus on building servers and data centers
TD Cowen sees Google Cloud's 2025 capex at $36 billion, up 52% year-over-year, with half allocated to AI compute capacity
Brokerage also expects Gen AI revenue to boost Google Cloud's annual growth by 5% from 2025 to 2030
44 of 56 brokerages rate the stock "buy" or higher, 12 "hold"; their median PT is $220- LSEG
Stock down ~14.02% this year, as of last close
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