Analysts from Wedbush, J.P. Morgan, and Bank of America anticipate that Google’s artificial intelligence initiatives will positively impact its second-quarter earnings, with Alphabet set to announce its earnings following the market close on Tuesday.
Amidst challenges related to delivery delays and workforce stoppages, Boeing is seeking to raise $19 billion.
Bank of America analysts Justin Post and Nitin Bansal have increased their revenue projections for Google, citing the integration of the Gemini AI platform into Google Cloud and AI Overviews in Google Search as key factors in driving sales. They expressed optimism about the potential of these AI integrations to enhance user engagement within Google’s core Search business, even acknowledging some issues faced during the early rollout of AI Overviews.
In April, Google reported an impressive 60% profit increase in its first quarter, driven in part by advancements in AI. Following this announcement, the company’s stock experienced a significant rise, elevating its market capitalization above the $2 trillion threshold, joining the ranks of Apple, Microsoft, and Nvidia.
Google’s robust profit performance followed extensive introductory phases for new AI products tied to its Gemini AI initiatives, showcasing innovations at its recent developer event, Google I/O. The new offerings included a universal AI assistant capable of interacting through smart glasses, with Google touting that its Gemini AI is 20% quicker than the latest ChatGPT version.
Dan Ives from Wedbush expressed more caution regarding AI Overviews but noted potential benefits for Search monetization over time. He also pointed out that AI is already having a positive impact on Google Cloud, projecting a 27% growth in Cloud revenue compared to the previous year.
Doug Anmuth from J.P. Morgan reinforced positive sentiments by naming Google among the firm’s top tech stock picks, commending the progress in Generative AI ahead of Alphabet’s earnings report.
However, analyst Josh Beck at Raymond James cautioned that despite the current favorable narrative surrounding AI at Google, the long-term impact on sales remains uncertain.