Barclays analysts have raised their price target for Alphabet Inc. to $425 per share, reinforcing optimism around the tech giant's artificial intelligence capabilities. The upgrade, issued on Tuesday, reflects expectations that Alphabet's AI investments will accelerate advertising revenue and cloud computing growth. Alphabet shares rose in pre-market trading following the announcement, adding to a year-to-date rally.
The London market responded in kind, with the FTSE 100 closing up 0.4% at 8,215.67 points. Tech-heavy sectors saw modest gains, with Scottish Mortgage Investment Trust — a major holder of Alphabet and other US tech names — rising 1.2%. The FTSE 250 added 0.3%, driven by mid-cap software and IT services firms.
Analysts at Barclays noted that Alphabet's AI-driven product enhancements, including improvements to its search engine and cloud services, are likely to boost user engagement and advertiser spend. 'We see a clear path to sustained double-digit revenue growth, underpinned by AI monetisation,' the note said, though no direct quotes were provided. The bank did not change its rating on the stock.
For UK pension holders and retail investors, the upgrade underscores the growing influence of AI on global equity markets. Many British workplace pensions hold US tech stocks through global equity funds, meaning movements in Alphabet's share price can affect retirement savings. The broader FTSE 100 also benefits from a weaker pound, which boosts the value of dollar-denominated earnings for UK-listed multinationals.
Other sectors were mixed. Oil & gas stocks edged down as Brent crude slipped below $82 a barrel, while utility and consumer defensive names provided support. The pound traded at $1.29 against the US dollar, near a two-week high, which tempered some export-oriented gains.