Alphabet(US:GOOGL) Zhi Tong Cai Jing·2025-11-06 07:04Core Insights - Google Cloud is expected to experience explosive growth in 2024, with Morgan Stanley analysts predicting a revenue increase of over 50% by 2026 [1] - The updated backlog model indicates a significant upward revision in revenue expectations, with a potential increase of over 15% compared to market consensus [1] - Google Cloud is viewed as a key driver for Alphabet's valuation expansion and AI-driven outperformance [1] Revenue Breakdown - Morgan Stanley's new model separates Google Cloud revenue into contributions from backlog and on-demand workloads [1] - As of Q3 2025, Google disclosed a backlog of $158 billion, with approximately 55% expected to be recognized as revenue within the next two years [1] - Historically, this backlog has contributed 45%-50% of Google Cloud's revenue, with the remainder coming from on-demand workloads [1] Growth Projections - On-demand business is projected to grow by 29% in 2023 and 37% in 2024, with a year-to-date growth of approximately 25% in 2025 [1] - Morgan Stanley's sensitivity analysis suggests that if Google adds over $50 billion in net new backlog in 2026 and on-demand growth exceeds 15%, total cloud revenue growth could surpass 50% [1] - Even under conservative assumptions of 25% growth in on-demand business and a $20 billion increase in backlog, the model still supports a growth expectation of over 50% [2]