MKM Partners Raises Alphabet Price Target As Cloud Growth Continues

Despite a "mixed" fourth-quarter, Alphabet Inc. GOOG is showing no signs of slowing down as website and cloud revenue growth continue to strengthen, according to MKM Partners. 

The Analyst

Rob Sanderson of MKM Partners reiterated a Buy rating on Google and raised the price target from $1,210 to $1,355.

The Thesis

Google has continued to experience strong growth in its websites segment, with website revenue growing by 23.8 percent in the fourth quarter, the highest in six quarters, Sanderson said in a Wednesday note. (See the analyst’s track record here.)

The cloud segment could also become a meaningful growth engine, and Google's cloud business — which now brings in $1 billion in revenue per quarter — is the fastest growing of the major cloud players, according to Google, Sanderson said. 

Google has room for "rapid expansion" in Asia, which accounts for only 15 percent of the firm's revenue today, Sanderson said. 

Price Action

At the time of publication, shares of Alphabet Inc. were trading up 2.6 percent at $1,131.73.

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