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Wedbush said Alphabet stock could rise significantly because Google is the “clear winner” in the AI space.
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Analysts pointed out that Google’s parent company has multiple advantages over other companies in the AI field.
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Further upside could be in store as Alphabet expands its partnerships and issues further guidance on AI projects.
Wedbush analysts said in a recent note that Alphabet stock is poised for a big rally as Google emerges as the clear winner in the artificial intelligence race sweeping Wall Street.
The company added Alphabet stock to its “best ideas list” and raised its price target for Google’s parent company from $160 to $175 per share. This represents a 15% increase in stock price from current levels, with Alphabet trading around $152 per share as of Friday morning.
“We believe the perceived structural risks to Google Search are overstated and continue to view Alphabet as a net beneficiary of generative AI,” the analysts said in a note Friday.
Wedbush said the main reason for the new price target is the wide range of data available to train AI models, as well as Android, search, and YouTube.
The company may soon work with Apple to integrate Gemini AI into iPhones.
The tech giant’s stock has lagged the gains of other members of the Magnificent Seven, including Amazon and Microsoft, which have risen 18% and 14%, respectively, since the beginning of the year, and the broader Nasdaq, which is up about 11%. is underperforming. 1 year.
But analysts said sentiment toward Alphabet’s AI efforts was improving, citing an increase in positive comments about Google in recent months. Meanwhile, Alphabet stock is still up more than 6% since the beginning of the year. Despite the controversy that erupted in March when Gemini was known to have created a historically inaccurate picture, the stock has shown some resilience.
Wedbush said the stock could see further upside in the future, calling on Google’s parent company to improve its business model for search generative experiences and deeper “cost restructuring” for developing AI projects. It added that it is calling for further guidance to be issued on this issue. Strengthen partnerships to develop his AI models with other companies.
“We continue to see Alphabet as a durable winner in the digital advertising industry with broad exposure and durable market share across media spend,” the analyst added.
Mr. Wedbush has been bullish on Alphabet and the broader AI-powered stock rally in recent months. Wedbush analysts predicted in a previous note that AI is likely to create a new 1995-style tech bull market, with tech stocks potentially rising another 33% in 2024. He said there was.
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