Analysts from Wedbush, J.P. Morgan, and Bank of America predict that Google’s advancements in artificial intelligence are likely to enhance its earnings for the second quarter. The parent company, Alphabet, is scheduled to announce its earnings on Tuesday.
In light of recent delivery issues and workforce disruptions, Boeing aims to raise $19 billion.
Bank of America analysts Justin Post and Nitin Bansal have boosted their revenue forecasts for Google, highlighting how the integration of its Gemini AI into Google Cloud and AI overviews in Google Search could stimulate sales growth. They expressed optimism in a research note last week, noting that “we remain positive on growing AI integrations across Google’s ecosystem,” suggesting that a broader rollout of AI overviews will potentially increase activity in the core Search business, despite some initial challenges the tool faced during its rollout.
In April, Google reported a remarkable 60% profit increase for the first quarter, notably attributed to AI, which led the company’s stock price to soar and its market capitalization to surpass $2 trillion, joining the ranks of Apple, Microsoft, and Nvidia.
This strong performance followed a series of AI product launches under its Gemini initiative. At the recent Google I/O developer conference, the company showcased a future AI assistant capable of visual interaction through smart glasses. Google claims this latest version of Gemini AI is 20% quicker than the latest ChatGPT.
While Dan Ives from Wedbush is less optimistic about the immediate impact of AI Overviews, he acknowledged that they could become beneficial for Search monetization over time. Additionally, he noted that AI is already contributing to growth in Google Cloud services and expects a 27% increase in Cloud revenue compared to last year.
Doug Anmuth from J.P. Morgan shared a positive outlook, naming Google among top tech stock picks, alongside companies like Uber and Amazon, and mentioned being encouraged by the advancements in generative AI prior to Alphabet’s earnings report.
However, Josh Beck from Raymond James cautioned that while the current narrative around AI for Google is promising, its long-term effect on sales remains uncertain.