Analysts from Wedbush, J.P. Morgan, and Bank of America anticipate that Google’s advancements in artificial intelligence will positively influence its second-quarter earnings. Alphabet, the parent company of Google, is expected to announce its earnings after the market closes on Tuesday.
Bank of America analysts Justin Post and Nitin Bansal have revised their revenue projections for Google, highlighting that the integration of the Gemini AI system into Google Cloud and AI Overviews in Google Search is likely to enhance sales. They expressed optimism regarding the growing presence of AI across Google’s services, suggesting that an expanded rollout of AI Overviews will likely increase activity in Google Search despite some initial setbacks during its debut.
Post and Bansal have adjusted their stock price target for Google from $200 to $206. In April, Google reported a remarkable 60% rise in profits during the first quarter, driven in part by AI innovations, which in turn boosted its stock price and catapulted its market valuation beyond $2 trillion, joining the ranks of Apple, Microsoft, and Nvidia.
The positive first-quarter results followed a series of new AI product launches associated with Google’s Gemini AI initiatives. Notable announcements at the Google I/O developer conference included an advanced universal AI assistant capable of visual and verbal interactions through smart glasses. Google claims that its latest Gemini AI is 20% faster than the latest ChatGPT.
While Wedbush’s Dan Ives expressed a more reserved view on the impact of AI Overviews, he noted that it may become beneficial for Google Search monetization over time. He also pointed out that AI is already proving advantageous for Google Cloud, predicting a 27% rise in Cloud revenue year-over-year.
J.P. Morgan’s Doug Anmuth shared an optimistic outlook, naming Google as one of its top tech stock picks, alongside Uber and Amazon, and expressed encouragement regarding progress in generative AI ahead of Alphabet’s upcoming earnings report. However, Raymond James analyst Josh Beck cautioned that, while the current AI developments appear promising, the long-term impact on Google’s sales remains uncertain.