The AI Boom Could Make This Magnificent 7 Stock a Much Bigger Business

Google (NASDAQ:GOOG | GOOG Price Prediction | GOOG Price Prediction) is turning into an AI infrastructure powerhouse that also owns the world’s biggest search engine.

In Q2 2026, Google Cloud revenue jumped 82% to $24.768 billion, and Search & other still brought in $63.271 billion, up 17%. Even so, shares are up just 7.47% year to date. The business is growing faster than the stock. Can Google hit $500 in 2027?

What’s Holding Google Back Right Now

Spending is the drag: Q2 CapEx reached $44.92 billion, up 100.14%, which pushed free cash flow to -$5.855 billion. Long-term debt rose from $46.5 billion to $98.2 billion, and buybacks were suspended. Google also raised $49.6 billion in net equity proceeds. Dilution is what all that compute costs.

Shares gained just 0.48% over the past week and 0.42% over the past month. Google has a beta of 1.225, so it swings a bit more than the market. For now, investors want proof that this spending will turn into cash.

Wall Street Sees 23.9% Upside. Our Model Says 28.1%

The consensus target is $422.34, or 23.9% above $340.74. Analysts rate it 13 Strong Buy, 43 Buy, 5 Hold and zero Sell. The base case calls for $436.46, representing to 28.09% upside. Our scenarios range from $369.26 on the bear side to $453.5 on the upside, with model confidence solid at 0.7.

I think Wall Street is too cautious. Analyst sentiment is 92% bullish, and earnings growth gives our model a modest lift of 0.03. The FY2027 EPS estimate has risen from $14.4741 to $15.1008 in 90 days. I expect price targets to follow those higher estimates.

Here’s What It Takes for Google to Reach $500

A jump to $500 from the current price of $340.74 would take a gain of 46.7%.

With forward EPS of $15.1008, a price of $500 implies a forward P/E of 33x. The $436.46 base case already implies 29x, so the bold target needs about 4x of additional multiple expansion.

Cloud backlog stands at $514 billion, and management expects to recognize just over 50% of it within 24 months. Most TPU system sales revenue is expected in 2027. Cloud operating margin also rose from 20.7% to 35.6%. CEO Sundar Pichai put it simply: “Our AI investments are redefining what’s possible across every part of our business.”

The forward P/E could also come down as earnings grow. If EPS reaches the high estimate of $17.2139, a $500 share price works out to just 29x.

The biggest concern is that CapEx keeps outpacing cash flow and the multiple contracts.

Where Google Trades Today vs Its Earnings Power

At $340.74, Google trades at 23x FY2027 estimates. It’s a cheap multiple for a company growing revenue 24.23%. Shares sit between a 52-week low of $236.07 and a high of $403.96.

The 10-year return is 774.31%. At this multiple, the stock has room to re-rate once spending turns into profit.

Is $500 Realistic? Here’s My Take

Getting to $500 calls for a 46.7% move higher. It’s a stretch, but a reachable one. It requires Cloud to keep converting backlog into revenue. TPU sales need to ramp in 2027. And free cash flow has to recover as the AI buildout develops. If Search slows down as it laps its recent acceleration, the thesis gets much harder.

Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Google could reach $500 in 2027. The broader AI infrastructure trade reaches well beyond the hyperscalers themselves. We highlighted seven of the suppliers supporting the expansion, from power to cooling, in a free report you can grab here.

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