Analysts from Wedbush, J.P. Morgan, and Bank of America are optimistic about Google’s second-quarter earnings, attributing potential growth to the company’s advancements in artificial intelligence. Alphabet, Google’s parent company, is scheduled to release its earnings report on Tuesday.
Following a positive first-quarter performance that saw a 60% profit surge, spurred by AI innovations, analysts have increased their revenue forecasts for the company. Bank of America analysts Justin Post and Nitin Bansal noted that the integration of Gemini into Google Cloud and enhanced AI features in Google Search are likely to drive sales higher. They have also revised their price target for Google stock from $200 to $206.
Despite some initial challenges with the rollout of AI overviews, which faced criticism for errors, analysts remain confident. They anticipate that these strategies will foster increased user activity in Google’s core Search business.
Wedbush analyst Dan Ives, while slightly more cautious about the potential of AI Overviews, believes that they could eventually bolster Search monetization. He also affirmed that AI developments are already benefiting Google Cloud, projecting a 27% year-over-year increase in Cloud revenue.
J.P. Morgan’s Doug Anmuth has expressed similar enthusiasm, highlighting Google’s role as one of the firm’s top tech stock picks alongside Uber and Amazon, crediting progress in GenAI ahead of the earnings report.
However, Raymond James analyst Josh Beck cautioned that, while the current outlook on AI is favorable, its long-term impact on Google’s sales remains uncertain.