Alphabet Inc., the parent company of Google, saw its stock soar after reporting strong third-quarter financial results, with analysts attributing the gains to robust performance in cloud computing, search, and YouTube, as well as the company’s significant investment in AI initiatives.
Several analysts raised their price targets and maintained optimistic ratings on Alphabet’s stock, highlighting the company’s strategic positioning in the rapidly evolving technology landscape. BMO Capital analyst Brian Pitz reiterated an ‘Outperform’ rating and raised the price target from $215 to $217, citing Alphabet’s surging cloud growth and its strategic use of AI. Pitz emphasized that “Cloud revenue accelerated once again on AI workloads and differentiated security offerings.” He also highlighted the positive impact of Alphabet’s AI initiatives on its search business, stating that “Google has 20+ years of AI initiatives that are now being rolled out to its enterprise and SMB clients.”
KeyBanc Capital Markets analyst Justin Patterson maintained an ‘Overweight’ rating and raised the price target from $200 to $215, acknowledging the company’s solid search and cloud growth. While Patterson acknowledged concerns about AI risks and regulations, he emphasized the company’s long-term revenue growth potential. “Believe patient shareholders will be rewarded,” he stated.
J.P. Morgan analyst Andrew Boone reiterated a ‘Market Outperform’ rating and raised the price target from $200 to $220, emphasizing the company’s stable search demand and accelerated cloud revenue. Boone noted that AI is at the forefront of Alphabet’s strategy, with AI Overviews being rolled out to over 100 countries and Gemini, its advanced AI model, being integrated into all seven Google products. He also expressed optimism about YouTube’s position in capturing linear TV dollars transitioning to CTV and recognized Alphabet’s strong position as a beneficiary of AI developments.
Seaport Research analyst Aaron Kessler upgraded the stock from ‘Neutral’ to ‘Buy’ and established a $200 price target, highlighting Alphabet’s advertising momentum and accelerating cloud growth. Kessler acknowledged the Department of Justice investigations as an overhang, but believes the appeals process will take time, making it a less immediate concern.
Needham analyst Laura Martin maintained a ‘Buy’ rating with a $210 price target, emphasizing the potential for Alphabet’s vertical integration through its generative AI initiatives across multiple business lines. She sees Google Search benefiting significantly from GenAI, along with other Alphabet businesses. Martin believes that “GOOGL’s primary upside valuation driver over the next 3-5 years will be its proprietary large language models.”
Goldman Sachs analyst Eric Sheridan maintained a ‘Buy’ rating and raised the price target from $208 to $210, emphasizing Alphabet’s strong operating momentum and its significant long-term investments in AI. He acknowledges the question of how these investments in AI will translate into sustained revenue growth, but remains optimistic about Alphabet’s position in the computing landscape.
Truist analyst Youssef Squali maintained a ‘Buy’ rating and raised the price target from $220 to $225, highlighting Alphabet’s continued investment in AI, technology infrastructure, and YouTube. Squali remains positive about Alphabet’s performance across Search, Cloud, and Devices, noting its position at the forefront of the AI race and its potential to expand its addressable market size.
Morgan Stanley analyst Brian Nowak maintained an ‘Overweight’ rating and raised the price target from $190 to $205, highlighting the company’s durable search business and better-than-expected results from YouTube. Nowak emphasized the company’s increased adoption, engagement, and monetization from AI initiatives, providing a positive outlook for the stock’s long-term trajectory.
Overall, analysts are optimistic about Alphabet’s future, recognizing its strong performance in key segments, its strategic investments in AI, and its position at the forefront of the evolving technology landscape. The company’s share price reflects this optimism, with GOOGL up 4.05% to $176.53 and GOOG up 4.14% to $178.22, both showing significant year-to-date gains.
