Google Stock Roars As Analysts Race To Raise Price Targets – Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Google parent Alphabet, Inc. GOOG GOOGL second-quarter results beat Wall Street’s expectations for the tenth straight quarter on Wednesday. Analysts are responding by raising their price targets across the board.

Q2 Results: Google parent Alphabet reported revenue of $96.43 billion, beating analyst estimates of $93.72 billion. The company reported second-quarter earnings of $2.31 per share, beating the Street estimate of $2.16 per share.

• Total revenue was up 14% year-over-year, driven by “robust momentum” across the business.
• Google Advertising: $71.34 billion, up from $64.62 billion year-over-year
• Google Search: $54.19 billion, up from $48.51 billion year-over-year
• YouTube Advertising: $9.8 billion, up from $8.66 billion year-over-year
• Google Cloud: $13.62 billion, up from $10.35 billion year-over-year

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Price Target Adjustments:

• Analysts from KeyBanc Capital Markets attributed growth across all segments to AI momentum and Justin Patterson raised the price target on Alphabet shares from $215 to $230.
• WestPark Capital analyst Curtis Shauger maintained a Buy rating on Alphabet and raised the price target from $210 to $220.
• JMP Securities analyst Andrew Boone maintained Alphabet with an Outperform and raised the price target from $220 to $225.
• BMO Capital analyst Brian Pitz raised Alphabet’s price target from $208 to $225.
• RBC analyst Brad Erickson raised Alphabet’s price target from $200 to $220 based on the outperformance of Search and Cloud segments.
• JPMorgan analyst Doug Anmuth maintained an Overweight rating on Alphabet and raised the price target on the stock from $200 to $232.
• Cantor analyst Deepak Mathivanan price target raise from $1.96 to $2.01.
• Rosenblatt Securities maintained a Neutral rating on Alphabet and raised the price target from $189 to $191.

Expert Ideas

BMO Capital Markets analysts highlighted Google Cloud’s revenue growth of 32% year-over-year and the number of deals exceeding $250 million, which doubled in the second quarter.

Analysts from RBC Capital Markets highlighted Alphabet’s beat across every revenue segment. AI Overviews now drive 10% more queries. Management reported queries and commercial queries growth contrary to assumptions that AI Overviews would slow queries.

JPMorgan focused on AI Overviews hitting 2 billion monthly average users in additions to Gemini with 450 million and AI Mode at 100 million without disrupting monetization as paid clicks still grew 4% in the second quarter. The analysts see Alphabet’s capex rise due to increasing AI demand and improving infrastructure access as a “good problem to have.”

Cantor Fitzgerald pointed to strong AI adoption rates across Alphabet’s products and highlighted advertisers using AI tools seeing 14% more conversions. Mathivanan said the focus now shifts to the pending DOJ ruling in August and maintained a Neutral rating on the stock.

Rosenblatt Securities analyst Barton Crockett expressed concern over Google’s dominance in traditional search. Currently, the company lags behind in its use of chatbots. This presents a risk if the market continues to shift toward AI chatbots.

Stock Price: Shares of Alphabet were up 0.99% at $193.41 on Thursday, according to data from Benzinga Pro.  

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