Latest news with #ColinSebastian
Business Insider
5 days ago
- Business
- Business Insider
‘Don't Overlook the Innovation Story,' Says Colin Sebastian About Alphabet Stock
Alphabet (NASDAQ:GOOGL) has long been the undisputed leader in internet search, but the rise of generative AI is beginning to raise questions about its continued dominance in the field. Confident Investing Starts Here: Against this backdrop, Baird's Colin Sebastian, an analyst ranked in the top 4% of Wall Street stock experts, attended the company's Google Marketing Live event and came away convinced that Alphabet is taking decisive steps to stay ahead of the curve. 'While there were 'breadcrumbs' that foreshadowed key announcements at Google Marketing Live, it's encouraging to witness the company innovating quickly in search, showing a commitment to monetization, and even taking aim at competitors in new ways,' the 5-star analyst said. 'While competition in search is intensifying, Google presented, in our view, a compelling suite of new ad products and agentic capabilities that can expand monetization and contribute incrementally to revenues.' Google announced a deeper integration of AI into its core search advertising platform, including the expansion of ad placements within AI Overviews (AIO). This means that both search and shopping ads will now appear directly in AI-generated summaries on desktop browsers in the U.S. Additionally, the company is introducing ad formats specifically designed for AI Mode, tailored to fit the more conversational and context-aware nature of AI-powered search experiences. 'Importantly,' adds Sebastian, 'these newer formats should help expand search advertising and reach into middle- and upper-funnel consumer journeys, directly contradicting the bearish view that new AI formats will simply disintermediate core search.' Sebastian thinks that advertisers will be quick to adopt these new ad formats, especially as Google has indicated that monetization tests are performing similarly to traditional search ads. Over time, the analyst believes these formats could lead to higher conversion rates for commerce and retail advertisers. In addition, advertisers running Performance Max and shopping campaigns will be able to access the new formats effortlessly. For users, the key will be Google's ability to match relevant ads with the context of longer, more detailed search queries, allowing users to find answers, including ad content, directly within the AI search experience without needing to scroll to traditional website links. As is typical for Google, the company is also introducing enhanced measurement and analytics tools, including new agentic capabilities to help marketers streamline and automate tasks. 'While many investors remain skeptical in our conversations,' notes Sebastian, 'Google also continues to report growth in queries where AI Overviews are shown, and Gen-Zers are the most active search cohorts.' So, what's the bottom line for investors? Sebastian is backing Alphabet shares with an Outperform (i.e., Buy) rating and a $190 price target, implying a potential upside of 10% over the next year. (To watch Sebastian's track record, click here) Wall Street at large is also bullish. GOOGL carries a Strong Buy consensus rating, based on 29 Buy recommendations and 9 Holds. The average price target stands slightly higher at $199.14, suggesting the stock could climb ~15% in the coming months. (See GOOGL stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Mint
23-05-2025
- Business
- Mint
As Google Embraces AI, One Stock Is Losing Out. Others Are at Risk.
Reddit stock has dropped about 40% this year. Reddit stock has taken a beating as investors worry how Google's new artificial-intelligence search features could dent the social-media platform's traffic. Other companies like Pinterest could also take a hit. Reddit stock has dropped 40% so far this year, even though the company reported better-than-expected earnings and revenue growth for its March quarter. This comes as growth in daily active users slows while Alphabet's Google updates its search functions. Google has been under a lot of pressure in recent months to prove it can be a winner in the AI search race. That's been more of a challenge than one might expect for the longtime search leader, because generative-AI chat bots like OpenAI's ChatGPT and Perplexity attract new users with quick, detailed, and conversational answers to user questions. One way Google has tried to combat this is through the introduction of AI Overviews, or AI-generated answers to search queries that appear on the top of the page. These AI Overviews pose a challenge for companies like Reddit, which rely on gaining traffic by users who click on their links in Google search. Things just got more complicated for Reddit and its peers, too. Google announced on Tuesday that it's integrating AI into its search engine through AI Mode—which will give users the ability to ask more complicated queries versus traditional searches in a conversational chatbot interface. Baird analyst Colin Sebastian wrote in a Tuesday research note that the launch of AI Mode 'will provide answers to questions that users might otherwise click-through to Reddit links for more details.' He lowered his price target on Reddit to $120 from $140 while maintaining a Neutral rating on the stock. Reddit directed Barron's to Reddit CEO Steven Huffman's comments on the company's May 1 earnings call. 'We do expect some bumps along the way from Google because we've already seen a few this year,' he said at the time, adding that as the 'search ecosystem is under heavy construction, the near term could be more bumpy than usual.' Reddit stock dropped 2.2% on Tuesday and 9.3% on Wednesday following Google's announcement, while the S&P 500 dropped 0.4% and 1.6% on those days, respectively. Reddit stock was gaining back some of those losses on Thursday, rising 4% to $99.64. Reddit isn't the only company that could see further slowdown in active users following this Google update. Photo-sharing platform Pinterest could see a decline in traffic if Google's AI Mode shows users pictures that stop them from needing to look at Pinterest posts. 'Our ability to maintain and increase the number of users directed to our platform from search engines is not within our control,' Pinterest said in its Risk Factor section of its most recent annual 10-K filing in February. 'Search engines, such as Google, have and may continue to modify their search algorithms…and policies or enforce those policies in ways that are detrimental to us.' Shares of online education company Chegg have fallen sharply this year. The company alleged back in February that the rise of AI Overviews have 'had a profound impact on Chegg's traffic, revenue, and workforce.' This led Chegg to sue Google. The latest AI Mode update can't be good news for the textbook seller moving forward. Chegg and Google both didn't immediately respond to a request for comment. AI Mode still hasn't been fully rolled out in the U.S., so now is the time for investors to decide whether the risk is worth taking for stocks that rely on Google clicks. Write to Angela Palumbo at
Yahoo
22-05-2025
- Business
- Yahoo
Why Reddit Stock Got Hammered on Wednesday
An analyst tracking the stock made a double-digit cut to his price target. He also left his rather lukewarm "neutral" recommendation unchanged. 10 stocks we like better than Reddit › One of the more up-and-coming social media stocks in recent times, Reddit (NYSE: RDDT), went down quite a bit on Wednesday. Investors traded assertively out of the stock following an analyst's price-target cut, to the point where it closed the day more than 9% in the red. That was a far steeper fall than the S&P 500 index's 1.6% decline. That pundit was Baird's Colin Sebastian, and before market open he changed his Reddit fair-value assessment to $120 per share, well down from his previous $140. Despite the double-digit adjustment, he left his "neutral" recommendation on the shares unchanged. The analyst's move, according to reports, was largely due to concerns about artificial intelligence (AI) capabilities being harnessed by tech titans such as Alphabet. Not long ago, that company's core Google unit rolled out AI responses to standard search queries, and it plans to continue beefing up its AI enhancements. To Sebastian, this is a threat to Reddit's user growth, as it can obviate the need for discussion with other users -- the bread and butter of Reddit's business -- in order to obtain an answer. Mitigating this to a degree, the pundit wrote, is a data-licensing agreement in place between Reddit and Google. While that's a legitimate source of concern for Reddit investors, I don't feel it's quite a deal-breaker. We still have quite a distance to go before AI functionalities can even come close to mimicking genuine and organic human reactions, so Reddit's forum-style presentation should continue to be popular. It should also keep attracting new users, adding to Reddit's base -- and providing a foundation for more double-digit percentage growth in fundamentals like revenue and profitability. Before you buy stock in Reddit, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Reddit wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy. Why Reddit Stock Got Hammered on Wednesday was originally published by The Motley Fool
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Why Reddit Stock Got Hammered on Wednesday
One of the more up-and-coming social media stocks in recent times, Reddit (NYSE: RDDT), went down quite a bit on Wednesday. Investors traded assertively out of the stock following an analyst's price-target cut, to the point where it closed the day more than 9% in the red. That was a far steeper fall than the S&P 500 index's 1.6% decline. The threat of AI That pundit was Baird's Colin Sebastian, and before market open he changed his Reddit fair-value assessment to $120 per share, well down from his previous $140. Despite the double-digit adjustment, he left his "neutral" recommendation on the shares unchanged. The analyst's move, according to reports, was largely due to concerns about artificial intelligence (AI) capabilities being harnessed by tech titans such as Alphabet. Not long ago, that company's core Google unit rolled out AI responses to standard search queries, and it plans to continue beefing up its AI enhancements. To Sebastian, this is a threat to Reddit's user growth, as it can obviate the need for discussion with other users -- the bread and butter of Reddit's business -- in order to obtain an answer. Mitigating this to a degree, the pundit wrote, is a data-licensing agreement in place between Reddit and Google. There's no substitute for the real thing While that's a legitimate source of concern for Reddit investors, I don't feel it's quite a deal-breaker. We still have quite a distance to go before AI functionalities can even come close to mimicking genuine and organic human reactions, so Reddit's forum-style presentation should continue to be popular. It should also keep attracting new users, adding to Reddit's base -- and providing a foundation for more double-digit percentage growth in fundamentals like revenue and profitability. Should you invest $1,000 in Reddit right now? Before you buy stock in Reddit, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Reddit wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor 's total average return is975% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Yahoo
14-02-2025
- Business
- Yahoo
Airbnb Soars as Q4 Profits, Bookings Surge; Baird, Goldman Sachs Upgrade Outlook
A double-digit increase in bookings and revenue helped Airbnb (NASDAQ:ABNB) turn a profit in Q4, pushing shares up 14.64% to $161.70 as of 12:00:45 ET on Friday, marking their highest level in nine months. The company reported Q4 GAAP EPS of $0.73, beating expectations by $0.15, while revenue climbed 11.7% year-over-year to $2.48 billion, surpassing estimates by $60 million. Growth was fueled by a 12% increase in Nights and Experiences Booked, alongside a modest rise in Average Daily Rate (ADR). Gross booking value reached $17.6 billion, while Adjusted EBITDA came in at $765 million, with a 31% margin. Warning! GuruFocus has detected 2 Warning Sign with ABNB. With its core business strengthened, Airbnb is now set for broader marketplace monetization and accelerated growth in late 2025 and 2026, according to Baird analyst Colin Sebastian. The firm upgraded the stock to Outperform/Speculative Risk from Neutral and raised its price target to $175, a 25% increase. Airbnb expects Q1 2025 revenue between $2.23 billion and $2.27 billion, reflecting 4-6% growth year-over-year. Excluding foreign exchange impacts, revenue growth would be 7-9%. Since going public in 2020, Airbnb's gross booking values have tripled, outpacing the broader travel sector. The company plans to maintain momentum through global expansion, new service offerings, and a more flexible payment system that makes hosting and managing properties easier. Additionally, new business ventures launching in May are expected to impact quarterly adjusted EBITDA throughout 2025, according to CFO Ellie Mertz. Goldman Sachs also upgraded Airbnb from Sell to Neutral, with analyst Eric Sheridan raising revenue estimates by 1-2% and adjusted EBITDA projections by 4-5% for 2025 and 2026. While new initiatives may take time to gain visibility, Sheridan sees less risk of earnings revisions negatively impacting shares. Taking into account Airbnb's global expansion, platform improvements, and its strategy to launch one to two new businesses per year, Sheridan believes the company is well-positioned for long-term organic and new market growth. This article first appeared on GuruFocus.
