Piper Sandler Lifts Alphabet Target to $400 on Projected $104 Billion TPU Sales

Piper Sandler has raised its price target for Alphabet Inc. (GOOGL) to $400 from $395, citing strong growth potential in the company's custom artificial intelligence chips.

The firm's analyst Thomas Champion estimates that external Tensor Processing Unit sales will reach $104 billion by 2028, a significant increase from the current estimate of $51 billion in 2027.

This projection is based on a new model that takes into account facilities and power-capacity constraints. The estimated TPU sales for 2026 are around $8 billion, which will jump to $51 billion by 2027.

The rapid growth of TPU sales is expected to have a substantial impact on Google Cloud revenue, with Piper Sandler now modeling total 2027 Cloud revenue at $204 billion, a $92 billion year-over-year increase. Of this, $153 billion will come from traditional cloud services and approximately $51 billion attributed to the TPU hardware ramp.

The company's latest quarterly results have lent support to the constructive view, with earnings per share of $9.11 exceeding the consensus estimate by a wide margin.