Alphabet's (GOOG, GOOGL) advertising revenue is expected to continue growing due to catalysts such as AI search expansion cycles, which could catalyze monetizing zero-click searches through AI Overviews, monetizing Gemini, and rolling out agentic capabilities, BofA Securities said in a note Thursday.

The brokerage noted that Google's Gemini is driving Search & Cloud acceleration, and its Cloud Tensor Processing Units, used to accelerate Cloud demand, are driving large new client acquisitions and rising spending, adding that, given capacity constraints, higher revenue growth is possible.

BofA said it expects higher net revenue for the company in 2026, but is conservative given increased capital expenditures to accelerate cloud demand.

For 2027, the firm raised its earnings expectations to $12.92 per share from $12.63 per share earlier, according to the note.

BofA reiterated its buy rating on the stock and its price target of $370.

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