Wolfe Research has materially raised its forecasts for Alphabet and Amazon, arguing that growth in both firms' cloud units is not fully recognized by investors. Analyst Shweta Khajuria increased revenue-growth assumptions for Google Cloud Platform and Amazon Web Services for 2026 and 2027 and pushed up capital expenditure projections for both parents.
For Alphabet's cloud business, Khajuria raised the Google Cloud Platform revenue-growth projections to 81% in 2026 and 48% in 2027. Wolfe notes those figures run 11% and 8% above consensus for the respective years. On the capital side, the firm lifted its 2027 capital expenditure estimate for Alphabet to $300 billion, which Wolfe says is roughly 26% higher than the Street's forecast. Wolfe also added 15 gigawatts of capacity in 2028 to its model. The firm expects Anthropic to represent between 25% and 30% of GCP revenue in both 2027 and 2028.
Khajuria also revised her outlook for Amazon Web Services. Wolfe now models AWS revenue growth of 37% in 2026 and 44% in 2027, figures that the firm says are about 6% and 19% above consensus for those years. Wolfe increased its 2027 capital expenditure estimate for Amazon to $280 billion, approximately 27% above the Street. Wolfe projects Anthropic will account for roughly 30% of AWS revenue in 2027.
Wolfe retained Outperform ratings on both Alphabet and Amazon. The firm raised its price target on Alphabet to $460 from $430, implying roughly 27% upside to current levels, while it slightly trimmed the Amazon target to $315 from $320, which still implies about 29% upside.
In Wolfe's commentary, Khajuria described Amazon as "one of best in class assets" within the firm's coverage. The note highlights accelerating AWS growth and expanding margins for Amazon, along with the company's exposure to large total addressable markets across retail, cloud, advertising and logistics. For Alphabet, Wolfe's Outperform stance is grounded in the view that the company's scale and investments in artificial intelligence should allow it to outpace the digital advertising market and gain share in cloud.
Key takeaways from Wolfe's update include sizeable upward revisions to revenue and capital spending forecasts for both names, a stronger role for Anthropic in cloud revenue mixes, and continued positive ratings from the analyst. The changes reflect Wolfe's view that Street expectations understate near-term cloud expansion at the hyperscalers.
Investors and market participants should note that Wolfe's revisions emphasize both revenue acceleration and larger-than-expected infrastructure spending, variables that will influence cash flow and capital allocation dynamics in coming years.