Alphabet (GOOGL) Stock: Analyst Projects TPU Revenue to Soar to $104B by 2028

Key Takeaways

• Piper Sandler forecasts Alphabet’s TPU chip revenue from external sales may surge to $104 billion by 2028.
• Analyst Thomas Champion lifted the GOOGL price target to $400 from $395, maintaining an Overweight rating.
• Shares declined approximately 1% in premarket sessions, hovering around $341.60.
• The firm’s Cloud revenue projection for 2027 exceeds consensus estimates by 15-17%.
• Alphabet’s most recent quarterly report showed earnings per share of $9.11, crushing the $2.87 forecast.

Alphabet’s stock experienced a modest 1% decline during Monday’s premarket hours, trading near $341.60, as technology stocks faced broader selling pressure. This downturn occurred even as Piper Sandler analyst Thomas Champion delivered an optimistic assessment, elevating his price objective on GOOGL from $395 to $400. Champion maintained his Overweight recommendation on the tech giant.

Alphabet Inc., GOOGL

The revised target suggests substantial appreciation potential from present valuation levels. Champion’s updated outlook stems from a comprehensive model analyzing Alphabet’s semiconductor operations.

The core of Champion’s investment case revolves around Google’s proprietary Tensor Processing Units. His analysis indicates the external hardware segment could deliver $104 billion in annual revenue by 2028.

This projection follows Google’s unprecedented move to publicly report external TPU sales data. The technology company unveiled these metrics during its second-quarter 2026 financial disclosure.

Champion constructed his revenue forecasts using a facilities and power-capacity methodology. His current model anticipates approximately $8 billion in TPU revenue for 2026, escalating dramatically to $51 billion throughout 2027.

Infrastructure Expansion Plans

The analytical framework assumes Google will achieve 3 gigawatts of operational TPU capacity by year-end 2027. This infrastructure footprint is expected to expand to 6 gigawatts by the conclusion of 2028.

Piper Sandler’s calculations incorporate $30 billion in compute-focused capital expenditures per gigawatt of installed capacity. This translates to approximately 1 million processor units per gigawatt.

Champion’s model also anticipates hardware operating margins approaching 30% for TPU-related sales. This profitability level would align with Alphabet’s current margin structure across other business units.

The investment bank’s 2027 Cloud revenue forecast now reaches $204 billion. This represents a $92 billion year-over-year increase, comprising $153 billion from traditional cloud services and $51 billion attributed to TPU hardware.

Piper Sandler’s Cloud EBIT projections for 2027 and 2028 exceed Wall Street’s collective estimates by 18-19%. Champion characterized his figures as “eye-popping” while acknowledging they might prove understated.

He referenced recent statements from Broadcom executives regarding Anthropic’s processor requirements. Broadcom has outlined plans for 5 gigawatts of Anthropic-linked infrastructure in 2027, expanding to 10 gigawatts by 2028.

Analyst Sentiment Overview

Additional Wall Street analysts have recently updated their Alphabet assessments. Goldman Sachs adjusted its target downward to $435 from $440 while preserving a buy recommendation.

China Renaissance reduced its price objective to $445 from $485. UBS decreased its target to $379 from $400 while continuing with a neutral rating.

Morgan Stanley lowered its price forecast to $400 from $415. According to MarketBeat tracking data, seven analysts assign Strong Buy ratings, 34 recommend Buy, and four suggest Hold positions.

The consensus price target among Wall Street analysts stands at $419.93. This exceeds Piper Sandler’s $400 projection.

Alphabet’s previous quarterly results demonstrated robust performance metrics. The company delivered $9.11 in earnings per share, substantially exceeding the $2.87 analyst consensus.

Total revenue reached $119.80 billion, representing 24.2% year-over-year growth. This surpassed the consensus projection of $116.53 billion.

Company insiders divested 441,428 shares valued at approximately $8.7 million during the previous 90-day period. Institutional investors and hedge funds collectively control 27.26% of outstanding shares.