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, the parent company of Google, is scheduled to release its earnings report on Tuesday evening.
A new delivery partnership between Uber and Darden Restaurants has positively impacted Darden’s stock prices. Analysts from Bank of America and Wedbush have increased their revenue forecasts for Google, citing the integration of its Gemini technology into Google Cloud and AI Overviews in Google Search as significant factors for boosting sales.
In a recent research report, Bank of America’s Justin Post and Nitin Bansal expressed optimism about the impact of AI integrations within Google’s overall ecosystem, stating that a wider rollout of AI overviews could increase activity in the core Search business. This comes despite earlier issues during the initial launch of AI overviews, which were mocked online for producing errors. They have raised their stock price target for Google from $200 to $206.
In April, Google reported an impressive 60% profit increase in its first quarter, largely attributed to AI advancements, which drove the company’s stock price up and pushed its market capitalization over the $2 trillion threshold, joining tech giants like Apple, Microsoft, and Nvidia.
The company’s strong first-quarter results followed several new releases in its Gemini AI lineup. Notable announcements from the Google I/O developer conference included the introduction of a universal AI assistant capable of interacting through smart glasses. Google claims its latest Gemini AI version operates 20% faster than the latest ChatGPT model.
While Wedbush’s Dan Ives remains cautiously optimistic about the potential of AI Overviews, suggesting they could positively influence Search revenue over time, he acknowledged that AI is already enhancing Google Cloud, projecting a 27% rise in Cloud revenue compared to last year.
J.P. Morgan analyst Doug Anmuth also shared an upbeat perspective on the tech giant, identifying Google as one of the firm’s preferred technology stocks alongside Uber and Amazon, and expressing enthusiasm about the advancements in generative AI ahead of Alphabet’s forthcoming earnings announcement.
However, Raymond James analyst Josh Beck cautioned that, although the current narrative surrounding AI at Google appears promising, the long-term effects on sales remain uncertain.