Citigroup has also increased the price target of Alphabet stock by 3% to $203 based on the basis of good performance within Google Search and YouTube. Although other AI-powered platforms, such as ChatGPT, with a massive number of users compared to Google Gemini, have emerged to hurt Google. Advertisers are in no doubt that Google will succeed with its AI services. Innovations like AI Overviews, AI Mode, and AI Max of the Search have increased click-through rates, indicating that the integration of AI into Google is increasing advertisement effectiveness. The release of Gemini 2.5 Flash-Lite should also increase the amount of ad creativity and put a move towards keyword targeting, which points to innovation in delivering and targeting ads.
YouTube remains one of the key engines that grow Alphabet, as people view it for more than 1 billion hours a day on television screens, and the platform secures 12.5% of total viewing time in the United States. YouTube Shorts have quickly gained popularity, and the number of views it attracts per day of more than 200 billion viewers is significantly higher than the number of views it received only a few months ago of 70 billion per day. Innovations like Veo 3 for Shorts will presumably increase the levels of user interaction and interest among advertisers.
Such encouraging dynamics have caused Citi to revise its revenue forecasts on Alphabet by 1.3% in 2025 and 2.1% in 2026. The valuation measure used on the firm is consistent, which indicates that there is an assurance that Alphabet can sustain its growth. This indicates that Alphabet has great potential to preserve its leadership in digital advertising by means of AI and video production innovation. The prospects are bright because the company is ready to respond to new user behavior and use AI to enhance the effectiveness of ads, which will likely keep attracting advertisers.
