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Wells Fargo’s $417 Alphabet Target Hinges on External TPU Sales
Wells Fargo lifted its Alphabet target from $411 to $417 on October 6, 2026, while keeping Overweight; the new target implied about 20% upside at the share price cited that day. Wells Fargo projected 2027 revenue 14% above market estimates, with 2027 EPS still in line with consensus; for 2028, it forecast revenue 20...
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Key takeaways
- Wells Fargo lifted its Alphabet target from $411 to $417 on October 6, 2026, while keeping Overweight; the new target implied about 20% upside at the share price cited that day.
- Wells Fargo projected 2027 revenue 14% above market estimates, with 2027 EPS still in line with consensus; for 2028, it forecast revenue 20% and EPS 5% above consensus.
- If the 27.5 times 2027 earnings multiple was unchanged, a higher target would imply a higher earnings base or other changed valuation inputs—not multiple expansion.
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openai.comCreate a landscape editorial hero image for this Studio Global article: Why did Wells Fargo analyst Ken Gawrelski raise Alphabet’s price target from $411 to $417 while maintaining an Overweight rating on October. Article summary: Ken Gawrelski’s October 6 increase from $411 to $417, while retaining Overweight, was a modest upward revision—not a higher valuation multiple. The reported investment case is that sales of Google’s TPUs to outside custo. Topic tags: general, general web. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts with fake numbers, click
Wells Fargo raised its Alphabet price target from $411 to $417 on October 6, 2026, and kept its Overweight rating. The central reason was its expectation that outside sales of Google’s tensor processing units (TPUs) could add substantially to revenue, especially in Google Cloud. At the share price cited in contemporaneous coverage, the $417 target represented about 20% potential upside—an analyst forecast, not a guaranteed return. 4
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The TPU forecasts behind the call
Wells Fargo projected external TPU sales of $9.2 billion in the third quarter of 2026 and $11.5 billion in the fourth quarter, according to the reported analyst estimates. These are forecasts, not confirmed sales results. 4
The bank expected Alphabet’s 2027 revenue to be 14% above Wall Street estimates, driven primarily by external TPU sales. But it projected 2027 earnings per share (EPS) to remain in line with consensus. For 2028, Wells Fargo forecast revenue 20% above and EPS 5% above market estimates. 4
That gap matters: a revenue forecast does not by itself show how much profit the sales will generate. The available reporting gives the revenue and EPS comparisons, but not detailed TPU margins or a breakdown of exactly how much of the projected Cloud growth comes from TPU sales.
How an unchanged 27.5-times multiple fits
If Wells Fargo kept its 27.5-times 2027 earnings multiple unchanged, raising the target would not represent a richer valuation multiple. Arithmetically, it would require a higher earnings base or some other change in the assumptions behind the target. However, the published figures available here say Wells Fargo’s 2027 EPS estimate remained in line with consensus; they do not provide a revised EPS figure or a detailed calculation showing how the $6 target increase was derived. 4
So the clearest explanation in the reporting is the improved revenue outlook, led by anticipated TPU sales—not evidence that Alphabet had already delivered those sales or that the target’s valuation assumptions had changed in a particular way.
Cloud growth supports the thesis, but execution still matters
Alphabet’s second-quarter 2026 results provide recent context: revenue was reported at $119.8 billion, up 24% year over year, while Google Cloud revenue was $24.8 billion, up 82%. Those results show strong reported Cloud growth, but they do not confirm Wells Fargo’s later external-TPU sales forecasts. 1
There is also a demand-side caveat. In coverage of the target change, Wells Fargo described Search revenue as solid but decelerating, while highlighting the competitive challenge created by AI products. 8 For investors, the key distinction is between a large forecast for AI-chip revenue and demonstrated, profitable demand. The reports provide sales and revenue projections, but not enough detail to establish the eventual margins on external TPUs.
What to take from the $417 target
The target increase was modest, and the Overweight rating was unchanged. Wells Fargo’s more consequential claim was that external TPU sales could put Alphabet’s revenue well ahead of consensus in 2027 and 2028. Its own 2027 EPS forecast remaining in line with consensus is an important qualification: the revenue opportunity should not be mistaken for an equivalent near-term earnings upgrade. 4
The thesis therefore rests on whether the forecast sales materialize and how they translate into earnings. The $417 target captures an analyst’s view of that potential; it does not resolve the uncertainties around the scale or profitability of the opportunity.
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What is the short answer to "Wells Fargo’s $417 Alphabet Target Hinges on External TPU Sales"?
Wells Fargo lifted its Alphabet target from $411 to $417 on October 6, 2026, while keeping Overweight; the new target implied about 20% upside at the share price cited that day.
What are the key points to validate first?
Wells Fargo lifted its Alphabet target from $411 to $417 on October 6, 2026, while keeping Overweight; the new target implied about 20% upside at the share price cited that day. Wells Fargo projected 2027 revenue 14% above market estimates, with 2027 EPS still in line with consensus; for 2028, it forecast revenue 20% and EPS 5% above consensus.
What should I do next in practice?
If the 27.5 times 2027 earnings multiple was unchanged, a higher target would imply a higher earnings base or other changed valuation inputs—not multiple expansion.