Analysts from Wedbush, J.P. Morgan, and Bank of America predict that Google’s advancements in artificial intelligence will contribute positively to its second-quarter earnings, set to be announced on Tuesday. Google’s parent company, Alphabet, is expected to benefit from the integration of its Gemini AI into Google Cloud and AI features in Google Search, which analysts believe will enhance revenue.
Bank of America analysts Justin Post and Nitin Bansal expressed optimism about Google’s growing AI capabilities, indicating that a broader deployment of AI features may increase engagement in its core Search business. They acknowledged minor setbacks during the initial launch of AI features but still raised their stock price forecast for Google from $200 to $206.
In its previous earnings report, Google revealed a 60% profit increase in the first quarter, significantly influenced by AI developments, leading to a boost in its stock price and market cap exceeding $2 trillion, placing the company alongside tech giants like Apple, Microsoft, and Nvidia.
Recent announcements from Google’s developer conference, including a next-generation universal AI assistant, further highlight its AI strategy. This latest Gemini AI is touted as being 20% faster than ChatGPT.
While Wedbush analyst Dan Ives expressed a more cautious view on AI features compared to his peers, he acknowledged that these innovations might gradually enhance Search monetization. He also maintains that Google’s Cloud revenue is likely to see a 27% rise year-over-year due to AI’s influence.
J.P. Morgan analyst Doug Anmuth included Google in the firm’s top tech stock recommendations, alongside Uber and Amazon, expressing confidence in the company’s Generative AI progress leading up to its earnings report.
However, Raymond James analyst Josh Beck cautioned that while the current outlook for Google’s AI seems promising, its long-term impact on sales remains uncertain.