Alphabet Wins a New Street-High Price Target Amid Bullish GenAI ...
Over the past 12 months, Alphabet (NASDAQ:GOOGL) has been leading the way in GenAI innovation. One of the key advancements has been the introduction of Gemini, a multi-modal AI model that powers various consumer and enterprise products. Gemini was prominently featured at the recent Google I/O event, showcasing products like Gemini Live, Veo, and Ask Photos.
Analyst Insights
According to Wolfe Research analyst Shweta Khajuria, Alphabet's position as an AI leader is well-established. While there are concerns about monetization models and costs associated with GenAI expansion, Khajuria remains bullish on Alphabet's prospects. The competition from Microsoft/OpenAI and potential partnerships with Apple are factors to consider, but Khajuria believes Alphabet is poised to reap significant benefits from its GenAI initiatives.
Ad Revenue Growth and Investor Sentiment
Ad revenue growth is a key focus for investors, with concerns about achieving double-digit growth in the face of competition from platforms like META and TikTok. Bears worry about YouTube growth and overall ad revenue performance, while bulls are optimistic about the impact of GenAI investments on Search and YouTube revenue. Khajuria aligns with the optimistic view, foreseeing accelerated ad revenue growth driven by GenAI contributions and trends in video and retail media.
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Analyst Recommendation
Khajuria has initiated coverage of GOOGL with an Outperform rating and a Street-high price target of $240, reflecting a 35% upside potential. The overall analyst sentiment is bullish, with a Strong Buy consensus rating based on 33 Buy recommendations against 6 Holds. The average price target is $202.89, suggesting a 14% upside over the next 12 months.
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended for informational purposes only. It is crucial to conduct your own analysis before making any investment decisions.
