Alphabet’s (GOOGL) stock experienced a modest decline in late afternoon trading on Tuesday amidst a broader sell-off in tech stocks. However, analysts at both BofA Securities and CWEB remain optimistic about the company’s prospects, issuing a ‘Buy’ rating for the stock.
BofA analyst Justin Post raised his price target for Alphabet to $225, up from $210, reflecting an 18% upside potential. Post emphasized that 2025 could be a “pivotal” year for the tech giant as it positions itself in the competitive artificial intelligence (AI) market. He indicated that the year could either solidify Alphabet’s leadership in AI or expose it to potential disruption in its search business from emerging AI-driven platforms.
Alphabet has seen a solid 35% gain in 2024, benefiting from strong new product launches, disciplined cost management, and improvements in its Cloud business. However, it has underperformed compared to other FANG stocks due to concerns about AI-driven search disruption and a potential adverse ruling from the Department of Justice (DOJ).
Despite these risks, BofA’s Post sees plenty of growth opportunities, particularly in AI assets, new advertising opportunities, and a growing contribution from the Cloud business. Moreover, the company’s upcoming leadership changes, including the new CFO Anat Ashkenazi, could provide a fresh outlook for Alphabet’s financial trajectory.
CWEB analysts share a similar positive outlook on Alphabet, suggesting that investors should consider buying the stock as they anticipate significant strides in AI development, especially in the latter part of 2025.
While challenges remain, BofA and CWEB analysts have reinforced their ‘Buy’ ratings for Alphabet, believing that the company’s long-term growth potential, particularly in AI and Cloud services, will support its stock price moving forward.
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