Analysts from Wedbush, J.P. Morgan, and Bank of America believe that Google’s advancements in artificial intelligence will positively impact its second-quarter earnings, with Google parent Alphabet set to release its earnings report on Tuesday afternoon.
Following an Uber delivery partnership, stocks for Darden Restaurants have surged. Bank of America analysts Justin Post and Nitin Bansal have raised their revenue forecasts for Google, highlighting the potential sales boosts from integrating the Gemini AI into Google Cloud and enhancing AI Overviews in Google Search.
The analysts expressed optimism regarding the expanding AI integrations within Google, predicting that a wider implementation of AI overviews could increase engagement in the core Search business. Despite initial challenges during the rollout of AI overviews, which were subject to online mockery for errors, the analysts adjusted their price target for Google’s stock from $200 to $206.
In April, Google reported a remarkable 60% profit increase for the first quarter, driven in part by its AI developments. This performance led to a surge in stock prices, elevating the company’s market capitalization past the $2 trillion mark, joining the ranks of Apple, Microsoft, and Nvidia.
Google’s positive first-quarter results were attributed to a series of AI product launches associated with its Gemini AI initiatives. Notable introductions at the Google I/O developer conference included a futuristic universal AI assistant capable of interacting through smart glasses. Google boasts that its latest Gemini AI operates 20% faster than the latest version of ChatGPT.
Dan Ives from Wedbush expressed a more cautious view on AI Overviews compared to his peers but indicated that it might support Search monetization in the long run. He also observed that AI is already benefiting Google Cloud and anticipates a 27% revenue increase from the Cloud sector compared to the previous year.
Doug Anmuth of J.P. Morgan shared a similar optimistic outlook, recognizing Google as one of the firm’s top tech stock picks, alongside Uber and Amazon. He expressed enthusiasm over the advancements in Generative AI ahead of Alphabet’s second-quarter earnings report.
However, analyst Josh Beck from Raymond James cautioned that while the present outlook on AI for Google appears favorable, its long-term impact on driving sales remains uncertain.