NEW YORK, Jan 2, 2026, 06:35 ET — Premarket
- Alphabet Class A shares were down about 0.3% in early premarket trade.
- Citizens lifted its Alphabet price target to $385, citing momentum from AI features in Google Search.
- Traders are watching U.S. activity data due later Friday and next week’s jobs report for clues on Fed policy.
Alphabet Inc’s Class A shares (GOOGL) were down 0.3% at $313 in U.S. premarket trading on Friday. The Google parent is valued at about $2.94 trillion. The stock trades at roughly 24 times trailing earnings, a valuation metric that compares the share price with the past 12 months of profit.
The muted move follows a late-December pullback that cooled a year-end run in mega-cap tech. Investors are weighing whether Alphabet’s AI push can keep search growth strong without squeezing margins as spending rises.
Nasdaq 100 futures were up about 1% in early trading, after the main indexes ended 2025 with four straight daily declines and a weak “Santa Claus rally,” the period covering the last five trading days of December and the first two of January. A final reading of an S&P Global economic activity survey is due later Friday, and next week’s labor market data is expected to steer bets on Federal Reserve policy after Chair Jerome Powell urged patience on additional rate cuts. Deutsche Bank analysts said the first trading day has been a poor guide to how the rest of the year plays out. Reuters
Citizens analyst Andrew Boone raised his price target on Alphabet to $385 from $340 this week, arguing that AI features are lifting search queries and engagement. “We view AI search as a tailwind near term for query growth,” Boone wrote, pointing to tools such as AI Mode and AI Overviews and the rollout of Alphabet’s Gemini 3 model. TD Cowen’s John Blackledge and Evercore ISI’s Mark Mahaney have also issued bullish calls on search, while flagging competition from AI chatbots such as ChatGPT and Perplexity. Barron’s
Analysts expect Alphabet’s earnings growth to slow sharply in 2026 while capital expenditures, or capex, rise as the company funds more AI infrastructure, Investors Business Daily reported. The publication cited forecasts for about 6% growth in earnings per share and capex rising nearly 29% to roughly $114 billion.
That spending puts more pressure on Google Cloud to keep gaining scale and on Search to prove that AI answers can be monetized with ads. Investors will listen for signs that AI products lift traffic and ad pricing without pushing costs higher than revenue.
Alphabet has not announced the date for its next quarterly report, but earnings calendars compiled by Wall Street Horizon and Zacks list Feb. 3 after the close as the expected window. Any update on cloud growth, capex plans and AI monetization is likely to drive the stock more than short-term swings in ad budgets.
Options prices point to a relatively modest move into Friday’s expiration, with an “expected move” of about $2.91, data from OptionCharts showed. Expected move is an options-based estimate of how far investors think a stock may travel over a set period. OptionCharts
For Alphabet, the core question remains whether AI-enhanced search expands the number of questions users ask, rather than shifting clicks away from the ad links that pay the bills. Bulls say richer answers keep users engaged and support ad demand over time.
Skeptics focus on the rising cost of running large AI models and on competition from chatbots that bypass traditional search. Those concerns can re-emerge quickly when interest rates rise or growth data surprise, because they affect how investors value long-dated cash flows.
