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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.
Yahoo
25-05-2025
- Business
- Yahoo
Alphabet Inc. (GOOG)'s AI Ad Strategy Expands Reach – But Analyst Keeps Neutral Stance
We recently published a list of . In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOG) stands against other AI stocks on Wall Street's radar. Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On May 23, Citizens JMP analyst Andrew Boone reiterated a 'Market Perform' rating on the stock. Boone has highlighted a shift in Google's ad strategy that now aligns with its advanced AI search capabilities. Google Marketing Live, Google's online event brimming with AI, demonstrated the latest advertising products from the company and the integration of AI into its search functions. According to Boone, AI search is broadening Google's total addressable market for search by handling more complex queries. This increased ad load is likely to maintain revenue projections for Google's search business. However, rising competition for search queries could limit Alphabet's stock valuation. Since the competitive landscape for Alphabet seems competitive and constraining, the firm places a neutral outlook on the shares. A user's hands typing a search query into a Google Search box, emphasizing the company's search capabilities. Analysts on Wall Street currently have a consensus 'Buy' rating on the stock. The average price target of $200 implies a 18.72% upside, however, the Street-high target of $234 implies an upside of 38.9%. Overall, GOOG ranks 3rd on our list of AI stocks on Wall Street's radar. While we acknowledge the potential of GOOG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GOOG and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey.
