1 Artificial Intelligence (AI) Stock to Buy Before It Soars 200%, According to Certain Wall Street Analysts

Trefis analysts think Alphabet (GOOGL -0.04%) (GOOG 0.03%) could be a $500 stock by 2030. That forecast comes from an opinion piece published in Forbes in October, and it implies a little over 200% upside from the current share price of $162. Should it prove accurate, shareholders would see annual returns of approximately 20% over the next six-plus years.

Wall Street also expects Alphabet to move higher in the near-term. Of the 68 analysts that follow the company, the lowest 12-month price target of $170 per share implies 5% upside. In other words, not one analyst thinks the stock will decline over the next 12 months. Of course, there is no such thing as a guarantee where the stock market is concerned, but the optimism is nevertheless noteworthy.

Here’s what investors should know about Alphabet, and what it might take for its share price to hit $500 by 2030.

Alphabet should benefit as the digital advertising and cloud computing markets expand

The investment thesis for Alphabet hinges on its strength in advertising and cloud computing, two markets projected to grow quickly. Specifically, eMarketer expects digital ad spending to increase at 10% annually through 2028, and IDC estimates public cloud spending will grow at 19% annually during the same period, led by high demand in artificial intelligence (AI) platform services.

Alphabet is the market leader in digital advertising with 27.4% revenue share. That figure is forecast to decline by half-percentage point next year as Amazon and other competitors gain ground. But Alphabet has a material advantage in that it owns six products with over 2 billion monthly users, including Google Search and YouTube. Those popular platforms engage consumers and create data that supports ad targeting.

Importantly, Alphabet is leaning on its AI expertise to defend its leadership in digital advertising. CEO Sundar Pichai says generative AI overviews on Google Search are boosting usage and improving user satisfaction, especially among people aged 18 to 24. The company also debuted over 30 new AI features for its ad tech software last quarter to streamline workflows and improve campaign outcomes.

Finally, Alphabet operates the third-largest public cloud in Google Cloud Platform. While the company trails Amazon and Microsoft by a wide margin, strength in AI infrastructure and large language models helped it gain a percentage point of market share over the past year. “Google’s Gemini combines a world-class model with enterprise cloud services,” according to Forrester Research.

Alphabet has an overlooked opportunity in its autonomous ride-hailing business Waymo

Trefis analysts highlighted autonomous driving subsidiary Waymo as a major reason why Alphabet could be a $500 stock by 2030. Investors often overlook that part of the business, but the robotaxi market is expected to increase at 67% annually through 2030, according to Straits Research. And Alphabet is well positioned to be a major winner.

Waymo was the first company to operate an autonomous ride-hailing service, and it now provides more than 100,000 rides per week across Phoenix, San Francisco, and Los Angeles. To add, Waymo has partnered with Uber to bring its ride-hailing platform to Atlanta and Austin in 2025. Analysts at Bank of America estimate Waymo’s revenue could reach $75 million this year, an inconsequential sum, but that figure could grow rapidly in the future.

Anecdotally, I recently visited San Francisco and had the chance to use the Waymo app. The experience was seamless and the technology was impressive. The Waymo vehicle was appropriately cautious as it navigated the congested city streets lined with pedestrians, but it was also assertive when necessary. I have never been more certain that robotaxis are the future.

What it would take for Alphabet to be a $500 stock by 2030

Investors should be aware of the regulatory risk. A federal judge ruled in August that Google had engaged in illegal practices to preserve its search monopoly. The Justice Department has suggested remedies ranging from restrictions to a breakup. But the judge will not issue a final decision until August 2025, and appeals could drag the process out for years.

Importantly, while the Justice Department has proposed a forced divestiture of the Chrome browser or Android operating system, some legal experts believe the final solution will be less severe. They say the most likely outcome is that Alphabet will be prohibited from paying companies like Apple for default search engine placement, according to CNBC.

With that in mind, Wall Street expects Alphabet’s earnings to increase at 15.6% annually through 2027, which makes the current valuation of 23 times earnings look reasonable. If we assume the company’s earnings increase at the same pace through 2030, Alphabet’s share price would reach $500 if the stock traded at 30.7 times earnings. That would be a material premium to its current valuation, which seems unlikely six-plus years down the road.

Having said that, Alphabet’s earnings could grow more quickly than analysts anticipate if Waymo becomes a meaningful source of profit. In that context, a $500 share price is not out of the question. Either way, patient investors should feel confident about buying a small position in this stock today.