Analysts at Trefis believe Alphabet could be a $500 stock by the end of this decade.
Analysts at Trefis believe Alphabet (GOOGL -0.04%) (GOOG 0.03%) could become a $500 stock by 2030. This forecast is based on an opinion piece published in Forbes magazine in October and suggests an upside of just over 200% from the current stock price. $162. If that proves accurate, shareholders could see annual returns of around 20% over the next six years.
Wall Street also expects Alphabet to rise in the near term. Among the 68 analysts who follow the company, the lowest 12-month price target of $170 per share suggests 5% upside. In other words, none of the analysts think the stock will fall over the next 12 months. Of course, there are no such things as guarantees when it comes to the stock market, but the optimism is still noteworthy.
Here’s what investors need to know about Alphabet and what it will take for the stock to reach $500 by 2030.
Alphabet should benefit from expanding digital advertising and cloud computing markets
Alphabet’s investment thesis hinges on its strength in advertising and cloud computing, two markets expected to grow rapidly. Specifically, eMarketer expects digital ad spending to grow at 10% annually through 2028, and IDC predicts that public cloud spending will increase over the same period, driven by high demand for artificial intelligence (AI) platform services. is expected to grow at 19% annually.
Alphabet is the leader in the digital advertising market with a 27.4% revenue share. This number is expected to decline by 0.5 percentage points next year due to the rise of Amazon and other competitors. But Alphabet has the big advantage of owning six products with more than 2 billion monthly users, including Google Search and YouTube. These popular platforms attract consumers and generate data that supports advertising targeting.
Importantly, Alphabet is relying on AI expertise to protect its leadership in digital advertising. CEO Sundar Pichai said the introduction of generative AI in Google Search is driving usage, especially among people between the ages of 18 and 24, and improving user satisfaction. The company also debuted more than 30 new AI capabilities in its ad tech software last quarter to streamline workflows and improve campaign outcomes.
Finally, Alphabet operates the third largest public cloud on Google Cloud Platform. Although the company is trailing Amazon and Microsoft by a wide margin, the strength of its AI infrastructure and large-scale language models has helped it gain several percentage points of market share over the past year. According to Forrester Research, “Google’s Gemini combines a world-class model with enterprise cloud services.”
Alphabet has a missed opportunity with self-driving ride-hailing business Waymo
Analysts at Trefis cited self-driving subsidiary Waymo as a key reason Alphabet could become a $500 stock by 2030. Investors often overlook this part of the business, but the robotaxis market is expected to grow at 67% annually through 2030, according to Straits Research. And Alphabet is well-positioned to be a major winner.
Waymo was the first company to operate a self-driving ride-hailing service and currently provides more than 100,000 rides per week in Phoenix, San Francisco, and Los Angeles. Additionally, Waymo plans to partner with Uber to bring its ride-hailing platform to Atlanta and Austin in 2025. Analysts at Bank of America predict that Waymo’s revenue could reach $75 million this year, an insignificant amount, but that number could rise rapidly in the future. I am doing it. .
As a side note, I recently visited San Francisco and had the opportunity to use the Waymo app. The experience was seamless and the technology was impressive. Waymo vehicles used reasonable caution while navigating busy city streets filled with pedestrians, but they also acted aggressively when necessary. I have never been more convinced that robotaxis are the future.
What will it take for Alphabet to become a $500 stock by 2030?
Investors should be aware of regulatory risks. A federal judge ruled in August that Google had acted illegally to maintain its search monopoly. The Justice Department has proposed remedies ranging from restrictions to parting ways. However, the judges are not expected to issue a final ruling until August 2025, and appeals could drag out the process for years.
Importantly, while the Justice Department has proposed forced sales of the Chrome browser and the Android operating system, some legal experts believe the final solution is not that serious. According to CNBC, they say the most likely outcome is that Alphabet will be prohibited from paying companies like Apple for default search engine placement.
With this in mind, Wall Street expects Alphabet’s profits to grow at 15.6% annually through 2027, making its current price-to-earnings ratio of 23x seem reasonable. Assuming the company’s profits grow at the same pace through 2030, Alphabet’s stock price would reach $500 if it traded at a price-to-earnings ratio of 30.7. This would be a significant premium to current valuations, but it is unlikely to occur more than six years from now.
That said, Alphabet’s profits could grow faster than analysts expect if Waymo becomes a meaningful profit source. In this context, a $500 stock price is not out of the question. Either way, patient investors should feel confident buying a small position in this stock today.
Bank of America is an advertising partner of The Motley Fool’s Ascent. Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Trevor Jennewine has a position at Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Bank of America, Microsoft, and Uber Technologies. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
