1 Wall Street Analyst Thinks Alphabet Stock Is Going to $200. Is It a Buy?

Alphabet (GOOG 1.06%) (GOOGL 1.08%) has been on a tear lately as far as its stock is concerned. That's because it has many factors going for it, including good fundamentals, investor hunger for tech companies involved in artificial intelligence (AI), and the declaration of its first-ever dividend.

The company's share price has been hitting new highs lately. It could soar even higher, according to one analyst who raised his price target on the company's C class non-voting stock (the one bearing the GOOG ticker symbol) at the end of April. Is that view realistic, though?

A well-performing incumbent

That raise came from DZ Bank's Ingo Wermann, who now feels Alphabet's C shares are worth $200 apiece, comfortably up from the $175 at which he previously pegged them. He maintained his buy recommendation on the tech giant.

Wermann made his adjustment several days after Alphabet unveiled its latest set of quarterly results. The company posted double-digit increases in both revenue and net income. The top-line result easily topped the average analyst estimate, while profitability absolutely crushed it.

As ever, Alphabet's growth was powered by its near-unassailable search business; it's telling that a long-standing verb many use for internet search is the brand name of the company's core asset, Google. Alphabet is far from a one-act story, however -- its dominant YouTube video clip streaming site is also bringing in piles of revenue, and its cloud business is nothing to sneeze at.

Wide moat, vast potential

At this point, we have to consider Google search to be quite the economic moat for Alphabet, given the service's runaway prominence and popularity.

With that monster tailwind at its back, the company has vast resources to develop basically any other revenue stream it wants. One of the more promising ones is AI -- despite some recent hiccups with its efforts -- and it will surely identify and plow into others. So I think Alphabet's best days as a stock may still be ahead of it, and it's a safe bet that the share price will increase substantially before long.