Alphabet Inc. (NASDAQ:GOOG) Stock Price Target Set at $171 by Cantor Fitzgerald

Alphabet (NASDAQ:GOOG) shares gained more than 3% in pre-market today after the tech giant reported first-quarter earnings that blew past expectations and reaffirmed its aggressive push into artificial intelligence, despite mounting global economic headwinds.

The Google parent posted earnings of $2.81 per share on revenue of $90.23 billion for the quarter ending March 31. While total revenue came in roughly in line with forecasts, operating income impressed at $30.6 billion, comfortably exceeding analyst estimates.

Alphabet continued to ramp up spending to support its AI ambitions, with capital expenditures reaching a record $17.2 billion. The company reiterated plans to invest $75 billion over the year to enhance its AI capabilities—a bold bet as competition intensifies, including from lower-cost AI models emerging overseas.

Google Search and related services generated $50.7 billion in revenue, up from $46.16 billion a year ago and slightly ahead of Wall Street expectations. The company highlighted growing user engagement with its AI Overviews feature, now reaching 1.5 billion monthly users.

Elsewhere, YouTube ad revenue rose to $8.93 billion, and Google Cloud grew to $12.26 billion, maintaining its upward trajectory and aligning with analyst projections.

BMO Capital analysts raised Alphabet (NASDAQ:GOOG) price target to $230, up from $217, while reaffirming an Outperform rating on the stock. The revised outlook reflects heightened optimism surrounding key revenue drivers across Alphabet’s core businesses, including Search, Google Cloud Platform (GCP), and YouTube.

According to the analysts, recent channel insights indicate Alphabet's advertising and cloud services are poised for stronger growth. Performance Max (PMax) is delivering enhanced return on ad spend for Search advertisers, leveraging data-driven optimizations. Meanwhile, the Gemini platform is expanding Alphabet’s addressable market with its ability to process more complex search queries effectively.

On the cloud front, GCP continues to gain traction, bolstered by innovations in middle-layer technologies like Gemini and Vertex AI. These advancements are enhancing efficiency and expanding the platform's appeal to enterprise clients.

YouTube is also experiencing momentum, particularly in its advertising initiatives. The introduction of lower-funnel tools, such as QR codes integrated with video ads, is resonating strongly with advertisers looking for more direct consumer engagement.

With robust developments across these business lines, Alphabet is well-positioned to sustain growth, justifying the increased price target.

• Stephen Ju from UBS sets a new price target of $187 for NASDAQ:GOOG, indicating an 11.7% potential upside from its current price.
• Google's search advertising business is challenged by competitors like TikTok, Amazon, and AI companies, impacting its market dominance.
• The stock's volatility and current market capitalization of approximately $2.06 trillion reflect investor interest and the competitive landscape in the digital advertising space.

On October 7, 2024, Stephen Ju from UBS set a price target of $187 for NASDAQ:GOOG. At that time, the stock was priced at $167.42, indicating an 11.7% potential upside. This target was a reduction from a previous $204 target, as reported by TheFly. Google's search advertising business faces challenges from competitors like TikTok, Amazon, and AI companies.

Rich Greenfield from LightShed Partners discussed these threats on 'Squawk Box', emphasizing the growing competition in digital advertising. As these companies innovate and capture market share, Google's dominance in the ad sector is under scrutiny. This competitive pressure may have influenced the revised price target for GOOG.

Currently, GOOG's stock price is $167.78, reflecting a 0.46% decrease or $0.78 drop. The stock has fluctuated between $167.39 and $169.90 today. Over the past year, it reached a high of $193.31 and a low of $121.46. This volatility highlights the market's reaction to the competitive landscape and Google's strategic responses.

Google's market capitalization is approximately $2.06 trillion, with a trading volume of 3.26 million shares. This substantial market cap underscores the company's significant presence in the tech industry, despite the challenges it faces. The trading volume indicates active investor interest, possibly driven by the evolving competitive dynamics in the digital advertising space.

Alphabet (NASDAQ:GOOG) shares soared over 9% intra-day today, reaching a record high, following the company's announcement of its fiscal Q1/24 results, which exceeded Wall Street expectations.

The company reported earnings per share (EPS) of $1.89, surpassing the consensus estimates of $1.51. Revenue also topped expectations, coming in at $80.54 billion against the anticipated $78.71 billion.

The quarter saw a significant year-over-year increase in operating income, rising 46% to $25.5 billion, with net income reaching $58 billion, or $1.89 per diluted share.

In a strategic move, the company declared its first-ever dividend at 20 cents per share and announced a new $70 billion share repurchase program, signaling a robust return of capital even as it continues to heavily invest in expanding its data center capabilities, particularly in generative AI.

Alphabet (NASDAQ:GOOG) reported its Q1 earnings results yesterday, with EPS of $1.17 beating the Street estimate of $1.08. Revenue grew 3% year-over-year to $69.8 billion, roughly in line with the company’s outlook, but significantly better than the Street estimate of $68.87 billion.

According to the analysts at Deutsche Bank, the main takeaway from the results was the stabilizing growth trends at Search and YouTube, which beat Street expectations by approximately 2% and 1%, respectively. YouTube also showed promising signs of revenue growth stabilization, increased short engagement, and improving monetization trends. Cloud revenue grew 28% year-over-year, in line with Street estimates.

Alphabet Inc. (NASDAQ:GOOG) shares closed more than 7% today despite the company’s reported Q2 miss. Quarterly EPS came in at $1.21, worse than the Street estimate of $1.28. Revenue increased 13% year-over-year to $69.69 billion, compared to the Street estimate of $70.04 billion.

The quarter was highlighted with overall "uncertainty" given the challenging macro environment. Search continues to be resilient given large number of advertisers and the performance nature of ads. The company is slowing hiring, but the impact will mostly be felt in 2023.

Analysts at Oppenheimer reduced their price target to $155 from $165, now assuming slower revenue over the next four quarters, even though Search advertising remains resilient.