Stray analysis
analysts view the concerns swirling around Alphabet Inc.’s crown jewel, Google Search, as overblown.
Evolving Scenario: Alphabet has garnered a spot on Stray’s Best Ideas List (BIL), raising the target price from $160 to $175 with an “outperform” rating.
In a communication examined by Benzinga, Stray posits Alphabet could thrive on generative AI.
“We believe the perceived structural risks to Google Search are overstated and continue to view Alphabet as a net beneficiary of generative AI.”
Deepwater Asset Management’s Gene Munster also struck an optimistic chord about Google’s potential deal with Apple, highlighting the anticipation among Google investors for this development in the past half-year.
Read Also: Neither Sundar Pichai Nor Sergey Brin—This Ex-Employee Warned Google 5 Years Ago That AI Was Coming For Their Search Engine
Stray envisions potential catalysts if Alphabet takes direct action to assuage investor concerns. These catalysts include:
- Better communication regarding the impact of Search Generative Experience on its business.
- Aggressive cost restructuring to safeguard margins.
- Sustained momentum in the enterprise generative AI sector.
Significance: Google’s recent strides unfold against a backdrop of apprehensions surrounding the company’s leadership and the looming AI threat to its search engine.
Critics have targeted CEO Sundar Pichai over an alleged dearth of foresight, with murmurs of employee discontent and talent attrition to competitors like Apple.
The company’s struggles with its Gemini AI chatbot have underscored the potential menace of AI to its search engine.
Market Action: Alphabet Inc Class A shares climbed 2.33% on Friday after concluding at $147.55 the prior day, per Benzinga Pro.
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Disclosure: This content benefited from Benzinga Neuro assistance, and the final review and publication were handled by Benzinga editors alone.
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