Alphabet Stock Drops on Legal Ruling and AI Spending Fears as Wells Fargo Lifts Target

Overview

• Alphabet shares fell more than 7% for the week, sliding to about $278 after a jury awarded $6 million in an addiction case that found YouTube and Meta liable.
• Wells Fargo lifted its price target to $397 and kept an Overweight rating, a call that implies about 41% upside from the latest close.
• The bank highlighted two revenue paths: licensing Google’s TPU artificial intelligence chips to Anthropic and the $32 billion Wiz acquisition that closed March 11.
• Investors are focused on a reported 2026 spending plan of $175 billion to $185 billion for AI data centers, custom chips, and networks, far above about $91 billion expected in 2025.
• Alphabet’s core business remains strong with annual revenue at $403 billion, search up 17%, and Google Cloud up 48% to $17.7 billion, though legal and spending risks continue to pressure large tech stocks.