TLDR
- GOOGL rose 2.8% in morning trading to $356.47, two days before Q2 2026 earnings
- BMO Capital raised its price target to $455, maintaining an Outperform rating
- KeyBanc targets $445, projecting Google Cloud and Search revenue growth above 20% through 2028
- Google is developing a new server chip codenamed “Frozen v2,” potentially 6-10x more efficient than current TPUs
- Google Cloud’s Q1 2026 backlog hit ~$462 billion, nearly doubling in a single quarter
Alphabet stock climbed 2.8% in morning trading Monday, hitting $356.47, as investors positioned ahead of the company’s Q2 2026 earnings report due after the closing bell on Wednesday, July 22.
The move comes with a wave of analyst upgrades providing a tailwind. BMO Capital raised its price target to $455 from $435 on July 17, keeping an Outperform rating even after reports of a delay in the Gemini 3.5 Pro model release.
KeyBanc set its target at $445. Analyst Justin Patterson argued that Wall Street is underestimating the staying power of Google Cloud and Search, projecting revenue growth above 20% through 2028.
Bank of America reiterated a $430 price target and nudged its Q2 earnings-per-share estimate higher going into the print.
The “Frozen v2” Chip Story
Adding fuel to Monday’s rally, The Information reported that Google is working on a next-generation server chip codenamed “Frozen v2.” According to people familiar with the matter, the chip could be between six and ten times more efficient than Google’s current tensor processing units.
The efficiency metric is based on the number of tokens the chip can serve per unit of power. That is a key figure for AI workloads where energy costs are a major concern.
Employees who worked on the chip suggested it could be directly integrated into the Gemini AI model itself, rather than sitting as a separate piece of hardware. The chips are expected to be ready for deployment as early as 2028.
A Google spokesperson confirmed to Seeking Alpha that the company is “constantly researching and experimenting with new innovations.” The spokesperson noted the company’s “full stack approach” of co-designing hardware and software from the ground up.
In April, Google had already unveiled its eighth-generation TPUs — the TPU 8t for training and the TPU 8i for inference — at a cloud conference in Las Vegas.
Cloud Backlog Drives Institutional Confidence
Beyond the chip news, Google Cloud’s Q1 2026 backlog of roughly $462 billion has kept institutional sentiment firm. That figure nearly doubled in a single quarter, a number that has kept buyers engaged even as broader AI spending scrutiny has weighed on chip names.
The broader market offered a mixed but supportive backdrop on Monday. The Nasdaq gained 0.5% and the S&P 500 was up 0.3%, partly recovering from the prior week’s sharp semiconductor-driven selloff that sent the Philadelphia Semiconductor Index down more than 20% from its recent peak.
The Dow Jones slipped 0.3%, reflecting rotation away from cyclical names toward mega-cap tech.
GOOGL outperformed its sector peers on the day, reclaiming ground lost during last week’s tech-wide pullback.
Wall Street consensus heading into Wednesday’s report points to strong performance across Search, YouTube, and Google Cloud.
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