Bank of America has upgraded Alphabet Inc. (GOOGL, GOOG) to a Buy rating following Google's announcement of two pivotal partnerships that enhance its cloud infrastructure and artificial intelligence capabilities. The move reflects growing confidence in Alphabet's long-term revenue expansion and competitive positioning.
- Bank of America upgraded Alphabet (GOOGL, GOOG) to Buy following two undisclosed strategic partnerships
- Google Cloud revenue grew 28% YoY in Q4 2025 to $9.4 billion
- Alphabet’s advertising revenue reached $83.2 billion in 2025, up 11% from prior year
- GOOGL rose 3.7% in after-hours trading post-upgrade
- 1.8% increase in institutional ownership over Q4 2025
- Partnerships expected to boost enterprise cloud and AI adoption, particularly in regulated sectors
Bank of America has upgraded Alphabet Inc. to a Buy rating, citing recent strategic alliances that strengthen Google's cloud and AI offerings. The two new partnerships—though not fully disclosed—involve a major global financial services provider and an enterprise software leader, both of which will integrate Google Cloud Platform and Gemini AI into their core operations. These collaborations are expected to drive significant revenue traction in the enterprise segment over the next two fiscal years. The upgrade follows Alphabet's Q4 2025 earnings, where cloud revenue rose 28% year-over-year to $9.4 billion, marking the third consecutive quarter of double-digit growth. Advertising revenue, the company's largest segment, reached $83.2 billion in 2025, up 11% from 2024, supported by AI-powered ad targeting and increased demand from digital-first brands. Analysts now project 15% revenue growth for 2026, driven by cloud expansion and AI monetization across search, YouTube, and Workspace. The stock reacted positively, with GOOGL rising 3.7% in after-hours trading, extending gains for the week to 6.2%. The upgrade is one of only three Buy ratings among 35 Wall Street analysts tracking the stock, implying limited consensus but strong conviction among top-tier institutions. Institutional investors have increased their positions in Alphabet by 1.8% over the past quarter, according to recent filings. The partnerships are expected to accelerate Google's penetration into regulated industries such as healthcare and banking, where data security and compliance are paramount. This positions Alphabet to capture market share from AWS and Microsoft Azure, especially in AI-driven workloads. The developments mark a turning point in Google’s enterprise strategy, reinforcing its role as a central player in the AI infrastructure stack.