TD Cowen reiterates Buy on Alphabet stock, cites AI growth By Investing.com

The market is still underpricing how much of Alphabet’s next leg is a supply-chain story, not just a software story. If agentic workloads scale as expected, the bottleneck shifts from model quality to inference cost, orchestration, and enterprise integration; that is structurally supportive for TPU utilization and for any adjacent vendor that helps Google monetize custom silicon faster than hyperscalers dependent on merchant GPUs. The second-order winner is the cloud stack around AI deployment and inference efficiency, while the biggest loser is any AI infrastructure exposure priced on perpetual GPU scarcity and unconstrained capex growth.

The near-term catalyst path is cleaner than the long-term one: product launches can drive cloud bookings and enterprise pilots over the next 1-2 quarters, but the real monetization proof will show up in cloud margin expansion and higher AI attach rates by year-end. That said, the market may be extrapolating too quickly from product breadth to durable revenue acceleration; enterprise AI adoption tends to be lumpy, with security, governance, and workflow redesign delaying conversion. The risk is that investors pay up for strategic optionality before the company demonstrates that agentic demand changes search monetization or cloud economics in a measurable way.

Regulatory overhang is the main asymmetry: anything that forces broader data access or weakens Google’s control over search/query traffic could cap the multiple even if cloud accelerates. The contrarian view is that the stock’s move may be too dependent on AI narrative momentum while consensus still treats search as the cash engine; if AI cannibalizes query behavior faster than it lifts monetization, revenue mix can become a headwind before it becomes a catalyst. In other words, the bull case is real, but the debate should center on margin durability and distribution control, not just model announcements.