1 Analyst Thinks Alphabet Stock Could Jump 20% on AI Chip Demand. Is He Right?

J.P. Morgan analyst Doug Anmuth raised Alphabet's price target to $425, representing ~23% upside, citing strong potential from selling custom Tensor Processing Units (TPUs) to other AI companies. Google Cloud revenue surged 82% to $24.8B in Q2 2026, and Anmuth believes it could double in Q3 as chip sales accelerate. Custom processor demand is projected to grow 45% annually, with potential TPU sales reaching $104B by 2028. However, concerns about broader AI spending and market sentiment shifts could pose risks.