BofA Securities has updated its Buy rating on Alphabet shares with a price target of $200 according to their recent AI-themed debate that included more than 200 investors. Responses showed mixed attitudes towards investors. Bears argued that Alphabet could have been losing user attention to AI apps such as ChatGPT. They also doubted the performance and transparency of management at Google as compared to competitors, and it may result in a reset of earnings estimates.
Conversely, bulls criticized this view by stating that Google integrates well into its ecosystem and owns its platforms, which enables it to earn good money on search advertisements, since people tend to buy something when they are searching. Also, they observed that Google already maintains good relations with publishers, unlike most AI platforms, which collect data scraped off the internet and have no partnerships.
Bulls are convinced that users are still attached to the familiar atmosphere of classic search results. They also believe that should the regulation with regard to AI in the future be made less ambiguous, then Google could experiment with AI more firmly. Lastly, its other business divisions, including Cloud, YouTube, and Waymo, have the potential to continue raising the stock price even when the main business of Google (search) may slow down. However, BofA Securities is optimistic that Alphabet can use AI to boost its main search business and the rest, which advances credibility to its stock upside trajectory, despite the stiff competition and regulatory risks. The discussion is fairly balanced yet heavily concentrated on the bullish perspective of Alphabet and its long-term performance levels in artificial intelligence and digital advertising.
Altogether, it might be treated as a smart idea to put $1,000 into Alphabet at this moment because of the company’s solid market position, its ability to integrate AI, and its numerous sources of revenue. Although there are some risks, the company ecosystem’s data-related benefits and undervalued growth potential propose a strong foundation to anticipate gains in the future. The available price target on the stock and a sustained price target of BofA indicate market sentiments on the stock to grow further on the foundation of AI advancements.
