HSBC initiated coverage on Alphabet Inc. (NASDAQ: GOOGL) with a Buy rating and a price target of $285.00, citing confidence in the company's full-stack artificial intelligence strategy and diversified business model.

The firm said Alphabet's AI ecosystem—anchored by its Gemini model, custom chip development, and extensive data from Search, YouTube, and other platforms—positioned it strongly within the cloud and advertising sectors. HSBC highlighted Google DeepMind as a key advantage underpinning its innovation.

Analysts said Google Search and Google Cloud remained the company's two most valuable businesses. They expected AI Overviews and browser-based Gemini integrations to help maintain Google's roughly 90% share in the traditional search market, even as ChatGPT led the in-app AI model segment.

For Google Cloud, HSBC projected that generative AI adoption would drive new customer acquisitions and reinforce cloud lock-in effects, while YouTube was expected to benefit from continued growth in paid subscriptions and connected TV advertising.

The firm valued Alphabet using a sum-of-the-parts approach and forecast about 16% upside potential, noting that the stock's 22.6x FY26 GAAP P/E multiple remained justified by its robust cloud and YouTube growth prospects.