Wall Street analysts were bullish on Alphabet stock following the Google parent’s earnings, as Search revenue continued to climb despite fears of AI displacing the dominant search engine.
“Another stable qtr for Search results increases our confidence in the AI transition and should ease concerns on a potential revenue reset,” Bank of America analyst Justin Post wrote in a note. Post raised his price outview on Google shares to $217 from $210.
Post and other analysts noted that AI Overviews assisted drive 10% more Search queries for the types of searches that the AI is applyd for. The Overviews has 2 billion monthly applyrs, and the Gemini app has hit 450 million monthly active applyrs.
RBC Capital analyst Brad Erickson raised his price tarobtain on Google shares to $220 from $200, declareing, “We still believe that GOOGL’s AI competitors along with its own AI search tools are driving traffic headwinds across the internet, and yet, it is still finding a way to distribute enough intentful volume to grow the business plenty quick.”
Still, Alphabet has fallen short of giving hard dollar figures for its AI business while focapplying on how the technology is driving growth in its existing businesses.
Notably, analysts didn’t seem discouraged by Alphabet raising its capital expfinishiture guidance for the year to $85 billion from $75 billion, driven by spfinishing in infrastructure such as data centers and server equipment to power AI.
Erickson stated the company’s “AI investment decisions are being created with clear ROI signals in front of it.”
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