Analysts from Wedbush, J.P. Morgan, and Bank of America predict that Google’s advancements in artificial intelligence will enhance its second-quarter earnings, with Alphabet set to release its financial results on Tuesday.
Following a partnership with Uber for deliveries, shares of Darden Restaurants have seen a significant rise. Analysts from Bank of America and Wedbush have increased their revenue projections for Google, citing the integration of the Gemini AI into Google Cloud and enhanced AI features in Google Search as key factors driving sales growth.
The analysts expressed optimism about the growing integration of AI across Google’s services, anticipating that a wider rollout of AI tools will stimulate greater activity in its core Search business. This optimism persists despite some initial challenges faced during the launch of AI features, which garnered attention for producing errors. The price target for Google’s stock has been elevated from $200 to $206.
In April, Google reported a remarkable 60% increase in profits for the first quarter, largely attributed to its AI initiatives, resulting in a surge in stock prices and pushing its market capitalization beyond $2 trillion, joining the ranks of tech giants like Apple, Microsoft, and Nvidia.
The positive first-quarter results came after Google introduced a series of new AI products as part of its Gemini AI initiatives. At the Google I/O developer conference, the company unveiled a next-generation universal AI assistant capable of interacting through smart glasses. Google claims its latest Gemini AI model outperforms the latest version of ChatGPT by being 20% faster.
While Wedbush analyst Dan Ives expressed a more cautious view regarding the effects of AI tools on Search monetization, he acknowledged the positive impact of AI on Google Cloud. He anticipates, similar to other analysts, a 27% rise in Cloud revenue compared to the previous year.
J.P. Morgan analyst Doug Anmuth shared an optimistic outlook as well, listing Google among the top technology stocks, alongside Uber and Amazon, and expressing encouragement regarding advancements in generative AI as the company prepares for its second-quarter earnings.
Raymond James analyst Josh Beck, however, cautioned that while the current narrative surrounding AI for Google appears favorable, the long-term impact of AI on the company’s sales remains uncertain.