Alphabet’s internet search and advertising businesses are thriving, according to Goldman Sachs.

The firm raised its price target to $1,350 from $1,250 for Alphabet shares, representing 11 percent upside to Wednesday’s close. Goldman also reiterated its buy and conviction list rating for the company.

"Our advertiser checks point to a solid 2Q, with particular strength noted in overall pricing, mobile search and product ads," analyst Heather Bellini said in a note to clients Thursday. “Following our conversations with ad partners, we believe there is upside risk to consensus revenue estimates.”

Alphabet shares are down 0.5 percent Thursday. Its stock is up 15 percent this year through Wednesday versus the S&P 500’s 5 percent gain.

The analyst said one advertising customer revealed Alphabet ad pricing rose a double-digit percentage year over year in the second quarter.

“Partners also noted continued strength in YouTube, and particular strength in Shopping ads. Product innovation remained a key topic as well, with partners expecting continued innovation,” she said.

Alphabet will report its second-quarter earnings results on July 23, according to its website.

— CNBC's Michael Bloom contributed to this story.