AI technology stack accelerates comprehensively, opening a new cycle of revenue growth!

Analyst Josh Beck clearly stated in his latest report that based on a bottom-up in-depth analysis of Google Cloud Platform (GCP) and core search business, he significantly revised up Alphabet's performance forecasts for 2026 and 2027. The revenue outlook for 2027 has exceeded the current consensus level on Wall Street, and the core driving this optimistic expectation is the comprehensive acceleration and commercialization of Alphabet's AI stack.

Against the backdrop of the AI arms race entering the deep waters of the technology industry, Raymond James' rating upgrade is not an isolated judgment, but a precise insight into the harvest period of Alphabet's full stack AI layout. Beck emphasized in his report to clients that "we believe Alphabet is likely entering a cycle of AI technology stacking narrative improvement and continuous upward forecasting, which has the potential to become one of the highest quality AI revenue acceleration themes in the public market. ”Behind this judgment is Alphabet's full chain AI capability explosion from underlying computing power, core models to upper level applications, as well as its deep empowerment of core businesses such as search and cloud services.

1、 Comprehensive breakthrough in AI technology stacking, building differentiated competitive barriers

Alphabet's advantage in AI technology stacking is reflected in its comprehensive layout from infrastructure to ecological applications, forming a closed-loop competitiveness that is difficult to replicate. At the bottom level of computing power, the company's self-developed TPU chip demonstrates extreme efficiency in AI inference, by stripping off non AI related circuits and adopting optical interconnect technology (OCI), achieving lower power consumption and higher bandwidth. Compared with traditional GPUs, it has significant cost advantages in large-scale inference scenarios. When the Gemini model processes billions of queries per day, the accumulated profitability of this unit cost advantage becomes an important cornerstone supporting performance growth.

At the core model and application implementation level, the Gemini series models continue to make breakthroughs in rapid iteration and scene penetration. The latest Personal Intelligence feature enables data inference across applications such as Gmail, Google Photos, YouTube, etc., providing users with personalized AI butler services while balancing experience and security through strict privacy protection mechanisms. More strategically, Alphabet has reached a multi-year partnership with Apple, and Gemini 3 will become the technological foundation for the next generation of Siri. It is expected to bring in approximately $1 billion in revenue annually and leverage Siri's daily interaction data of 1.5 billion requests to continuously strengthen Gemini's Agent capabilities, controlling the entire chain from user intent to application execution. This ecological level collaboration further consolidates its industry position in AI technology stacking.

2、 Dual engine driven revenue growth, supported by continuous upward revision of performance forecasts

Raymond James' upward revision of Alphabet's performance forecast highlights the AI empowerment upgrade of the two core growth engines, GCP Cloud Business and Search Business, both of which demonstrate strong growth resilience and room for imagination. As the second growth curve, Google Cloud has benefited from the explosive demand of AI customers. In Q3 2025, its revenue proportion has reached 15%, and the year-on-year growth rate has rebounded to 34%, with a synchronous increase in profit margin to 24%. With the deepening of cooperation with large AI laboratories such as Anthropic and OpenAI, as well as the continuous release of production capacity, Cantor Fitzgerald predicts that by 2027, Google Cloud revenue is expected to reach 60% of Amazon's cloud business, a significant leap from 40% in 2024.