JPMorgan Just Removed Alphabet From Its Analyst Focus List
JPMorgan (NYSE:JPM | JPM Price Prediction) removed Alphabet (NASDAQ:GOOG) from its Analyst Focus List but kept its Overweight rating on the stock. The firm pointed to slower AI search monetization and heavy AI infrastructure spending. JPMorgan lowered its near-term confidence…
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JPMorgan (NYSE:JPM | JPM Price Prediction) removed Alphabet (NASDAQ:GOOG) from its Analyst Focus List but kept its Overweight rating on the stock. The firm pointed to slower AI search monetization and heavy AI infrastructure spending. JPMorgan lowered its near-term confidence in Alphabet stock without giving up its longer-term bullish view.
| Ticker | Company | Firm | Action | Old Rating | New Rating | Old Target | New Target |
|---|---|---|---|---|---|---|---|
| GOOG | Alphabet | JPMorgan | Removed from Analyst Focus List | Overweight | Overweight | Not disclosed | Not disclosed |
Inside JPMorgan’s Case for Pulling Alphabet
JPMorgan finds stronger near-term momentum at Meta Platforms (NASDAQ:META) than at Alphabet. The third-quarter results show where the pressure is. Search revenue grew 12% to $63.3 billion, even though query growth was the highest in five years. On the earnings call, JPMorgan’s Douglas Anmuth asked about that gap. Alphabet’s chief business officer said that strong growth in AI Mode queries “had an impact because of the lower monetization we were seeing in AI Mode.”
Spending is the other concern. Capex reached $51.4 billion in the quarter, and free cash flow was negative $9.1 billion. Management kept its 2026 capex guidance at $195 billion to $205 billion and said it expects capex to “increase significantly in 2027.” All of that expansion has to be powered, cooled, and connected by someone, and we included seven of those suppliers into a free AI infrastructure report.
Company Snapshot: Growth Is Still Strong
Third-quarter revenue rose 24.6% to $127.58 billion. Google Cloud revenue grew 103% to $30.71 billion, and the Gemini app reached 1 billion users. GAAP EPS of $2.12 missed the $2.97 consensus. The main cause was an $8.7 billion loss on equity securities, which ended a 12-quarter streak of earnings beats.
Google also revealed new 8tx and 8i Max TPU variants, which are built for secure, long-context AI workloads. The new chips expand its in-house alternatives to NVIDIA (NASDAQ:NVDA) hardware.
Why the Move Matters Now
The stock traded at $293.16 Monday morning. That is 15.61% lower than a month ago and 6.4% lower for the year. Shares have still risen 5.37% over the past week. Reuters wrote that the shares may be ready for a corrective rally.
Valuation remains low at a P/E of about 12. Google Cloud’s backlog stands at $561 billion, and management expects to recognize just over 55% of it as revenue within 24 months. JPMorgan’s decision shows timing. It still holds a positive view of the business, but it finds stronger catalysts at Meta in the near term.
What It Means for Your Portfolio
Those saving for retirement should note that JPMorgan kept its Overweight rating. The balance sheet is strong, with $265.1 billion in cash and marketable securities. The quarterly dividend is $0.22 per share.
Two issues are worth tracking:
- Whether ads in AI Overviews and AI Mode, which are now expanding internationally, close the gap between query growth and revenue growth.
- Whether the 2027 capex plan, due on the Q4 call, keeps free cash flow negative.
JPMorgan’s revised outlook deserves a closer look from anyone with a multi-year time horizon. Near-term volatility remains a real risk while Alphabet keeps spending heavily on AI.
Contact [email protected] for any questions or corrections.
After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
