Google’s valuation to go up due to its strategic position, corporate culture – Needham

Needham has raised its earnings estimates and price target on tech giant Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and expects its strategic position and corporate culture to drive valuation upside.

Analysts led by Laura Martin said that corporate culture at the tech giant is an important upside value driver, and the company boasts the largest team for GenAI, with only two potential defections to Meta Platforms (META).

“We believe this is because GOOGL has the culture, resources, data flows, global scale, and financial capital to retain and motivate the best teams of tech-first human capital. This strong tech culture saves public shareholders money,” Needham said on Wednesday.

According to Needham, Google’s current strategic position is strong because of its digital advertising dominance; YouTube, which is the most-streamed service in the U.S.; and GenAI, in which they expect its proprietary LLMs to drive valuation over the next 3-5 years.

The research firm said Google is “best in class” at having people and assets in the “next” big thing before other companies.

They noted that Google benefited during the internet wave with its search engine, in the mobile tech wave with Android, and in the cloud era with Google Cloud. It is now among the leading firms in the AI race with Gemini.

Needham also thinks GOOGL is worth more in pieces than together, and if the government forces it to split up, the share price will appreciate for public shareholders.

For full-year 2025, they estimate GOOGL to report total revenue of $387.2B (up 11% y/y, 0.2% above its previous estimate); OIBDA of $173B (up 15% y/y, 1.5% above its previous estimate); and EPS of $9.64 (up 20% y/y, 1.6% above its previous estimate).

For full-year 2026, Needham estimates total revenue of $429.1B (up 11% y/y, 0.1% above its previous estimate); OIBDA of $195.4B (up 13% y/y, 1% above its previous estimate); and EPS of $10.28 (up 7% y/y, 0.4% above its previous estimate).

GOOGL PT was raised to $210 from $178, implying an upside of 15.4%.