Bank of America doubles down on Google stock ahead of earnings

Bank of America reiterated its buy rating on Alphabet ahead of Q2 2026 earnings and raised its price target to $430, arguing the quarter could show an unusually large EPS beat due to a roughly $80 billion unrealized gain from Alphabet’s stake in Anthropic. The note says Anthropic’s valuation jumped from $380 billion in Q1 to $965 billion in Q2 after a $65 billion fundraising round, inflating reported operating income and making headline earnings less reflective of core performance. Underneath that accounting effect, BofA expects strong underlying trends: Google Cloud revenue growth of about 70%, Cloud margins near the mid-30% range, Search growth of 17%, and total Q2 revenue of $102.1 billion. The bank also lifted full-year 2026 estimates and said investors should focus on Cloud margins, AI demand, capex guidance, and monetization of AI products rather than the one-time valuation boost.