Proactive Investors - Google parent company Alphabet (NASDAQ:GOOGL) Inc (NASDAQ:GOOG) has earned a repeat ‘Buy’ rating from analysts at the Bank of America (NYSE:BAC) after the company’s Cloud division showcased its growing AI hardware and software capabilities at the annual Cloud Next event.
At the event, Google announced new custom AI chips, platform-wide integration of its AI tool Gemini, AI add-ons for Google Workspace, and strategic partnerships, among other updates.
It also announced traction with customers for its AI offering, with more than 60% of funded GenAI startups and about 90% of GenAI unicorns being Google Cloud customers, the analysts highlighted.
“Our top takes are that Google’s hardware advances, Gemini progress and AI-driven app demos should help sentiment on AI capabilities, while the ability to ground models with Google search/data was an appealing capability,” they wrote.
They added that the Cloud AI cycle could be a positive driver for Google stock given its growing scale and potential contribution to overall revenue growth.
They also see increasing Cloud margins helping with earnings per share (EPS), expecting them to contribute $6 billion in profits over three years.
The analysts awarded Alphabet a $173 price target, implying upside to its current share price of about $156.