Analysts from Wedbush, J.P. Morgan, and Bank of America anticipate that Google’s advancements in artificial intelligence will enhance its earnings for the second quarter. Alphabet, Google’s parent company, is scheduled to announce its earnings following the market close on Tuesday.
Following a recent Coinbase poll, it has been revealed that Donald Trump and Kamala Harris are closely competing for the support of cryptocurrency voters.
Bank of America analysts Justin Post and Nitin Bansal have upgraded their revenue projections for Google, citing the integration of the Gemini AI technology into Google Cloud and the introduction of AI Overviews in Google Search as key drivers for increased sales. They expressed optimism about the growing AI capabilities across Google’s platforms, predicting that the wider use of AI Overviews would lead to heightened activity in the core Search business. This optimism persists despite earlier challenges with the AI Overviews, which faced criticism for producing errors. Consequently, they have raised their price target for Google’s stock from $200 to $206.
In April, Google reported a remarkable 60% increase in profits for the first quarter, significantly fueled by its AI initiatives. This surge prompted a rise in the company’s stock price, elevating its market capitalization beyond the $2 trillion threshold, placing it among industry giants like Apple, Microsoft, and Nvidia.
The company’s positive first-quarter results were bolstered by the rollout of its Gemini AI products. At the Google I/O developer conference, Google showcased several innovations, including a universal AI assistant capable of interacting through smart glasses. The company claims its latest Gemini AI is 20% faster than the latest version of ChatGPT.
While Wedbush analyst Dan Ives expressed a more cautious view on AI Overviews compared to Post and Bansal, he noted that these innovations could provide a long-term benefit for monetizing Search. He also pointed out current contributions from AI to the Google Cloud segment, predicting a 27% year-on-year growth in Cloud revenue, consistent with other optimistic assessments on Wall Street.
J.P. Morgan’s Doug Anmuth shared similar positive expectations, labeling Google as one of the investment firm’s top technology picks, alongside Uber and Amazon, while expressing optimism regarding advancements in generative AI ahead of Alphabet’s earnings announcement. However, Raymond James analyst Josh Beck cautioned that while the present narrative around AI is encouraging for Google, the long-term impact of AI on sales remains uncertain.