This Is Google's Secret Weapon To Outpace ChatGPT In Search ...
Benzinga Rankings provide valuable insights into stock metrics, including the recent upgrade of Alphabet (NASDAQ: GOOGL) by Citizens JMP analyst Andrew Boone. Boone's upgrade from Market Perform to Market Outperform with a price target of $220 is driven by the potential of Artificial Intelligence (AI) to benefit Google's search capabilities.
The Impact of AI on Google's Search Dominance
Boone believes that AI will act as a positive force for Google, outweighing any potential threat from ChatGPT diverting search queries. He argues that AI enhances Google's search functionality by addressing a wider range of queries and improving user intent inference, thus driving monetization opportunities.
One key aspect of Boone's analysis is Google's advancements in AI technology. He highlights the success of Google's AI Overviews, which have already shown a 10% query growth during testing. Boone projects a significant expansion of AI Overviews' user base, expecting it to cover a substantial portion of all search queries in the near future.
The Role of AI in Accelerating Google's Revenue Growth
Boone also emphasizes Google's Smart Bidding Exploration and AI Max for Search Campaigns as tools that empower advertisers to focus on query intent, boosting the commercialization of searches. This, coupled with the anticipated acceleration in query growth, leads Boone to forecast an uptick in Google's search revenue for the coming quarters.
Revenue Forecast and Market Insights
For the second quarter of 2025, Boone has revised Alphabet's revenue forecast to $79.9 billion and EPS to $2.16, reflecting his optimistic outlook on Google's performance. Despite previous concerns about antitrust issues impacting Google's distribution, Boone now sees the market pricing in these risks, prompting his recent upgrade of Alphabet's shares.
GOOGL stock is currently trading higher, showing positive market sentiment towards Google's future growth prospects.
