11:07 AM EST, 02/05/2026 (MT Newswires) -- Alphabet's (GOOGL, GOOG) revenue from search and cloud, and overall earnings in 2027 are expected to grow higher than previously expected, according to a Morgan Stanley note published Thursday.

Morgan Stanley increased Alphabet's 2027 earnings estimate by 3%.

Alphabet's accelerating multi-faceted engagement and capital expenditure investment for further artificial intelligence-driven growth are the second indicator this earnings season, after Meta (META), that the gap between them and smaller technology players is likely to widen faster than expected, analysts said.

Alphabet's 2026 capital expenditure of $185 billion is now 32% larger than the total data center spending across the 6 largest players only 3 years ago, Morgan Stanley said.

Alphabet's results showcase how it is spending to manage capacity limitations to deliver faster growth in its most important businesses, even via heavy investment in long-term opportunities, analysts said.

Morgan Stanley has an overweight rating on the stock and a $330 price target.

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