Trefis analysts think Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) could be a $500 stock by 2030. That forecast comes from an opinion piece published in Forbes in October, and it implies a little over 200% upside from the current share price of $162. Should it prove accurate, shareholders would see annual returns of approximately 20% over the next six-plus years.
Wall Street also expects Alphabet to move higher in the near-term. Of the 68 analysts that follow the company, the lowest 12-month price target of $170 per share implies 5% upside. In other words, not one analyst thinks the stock will decline over the next 12 months. Of course, there is no such thing as a guarantee where the stock market is concerned, but the optimism is nevertheless noteworthy.
Here's what investors should know about Alphabet, and what it might take for its share price to hit $500 by 2030.
The investment thesis for Alphabet hinges on its strength in advertising and cloud computing, two markets projected to grow quickly. Specifically, eMarketer expects digital ad spending to increase at 10% annually through 2028, and IDC estimates public cloud spending will grow at 19% annually during the same period, led by high demand in artificial intelligence (AI) platform services.
Alphabet is the market leader in digital advertising with 27.4% revenue share. That figure is forecast to decline by half-percentage point next year as Amazon and other competitors gain ground. But Alphabet has a material advantage in that it owns six products with over 2 billion monthly users, including Google Search and YouTube. Those popular platforms engage consumers and create data that supports ad targeting.
Importantly, Alphabet is leaning on its AI expertise to defend its leadership in digital advertising. CEO Sundar Pichai says generative AI overviews on Google Search are boosting usage and improving user satisfaction, especially among people aged 18 to 24. The company also debuted over 30 new AI features for its ad tech software last quarter to streamline workflows and improve campaign outcomes.
Finally, Alphabet operates the third-largest public cloud in Google Cloud Platform. While the company trails Amazon and Microsoft by a wide margin, strength in AI infrastructure and large language models helped it gain a percentage point of market share over the past year. "Google's Gemini combines a world-class model with enterprise cloud services," according to Forrester Research.