A Wall Street analyst has reaffirmed a bullish outlook for Alphabet (NASDAQ: GOOGL) stock at a time when the equity is experiencing volatility tied to general market sentiment triggered by uncertainty regarding trade tensions.
The bullish projection coincides with a period when GOOGL seeks to reclaim the $200 resistance level.
Ahead of market opening on February 10, GOOGL showed strength, up 0.98% to $188.89. Nevertheless, Alphabet ended the last trading session at $187.14, down 1.8% year-to-date, though the stock remains in the green, up 26% over the past year.
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Analyst updates GOOGL share price
Regarding GOOGL’s share price outlook, Bank of America (BofA) analyst Justin Post on February 10 reaffirmed his ‘Buy’ rating, setting a target of $225, implying a 20% upside.
Google’s strong search market position informed the projection amid rising competition from artificial intelligence (AI)-powered platforms such as ChatGPT, which is capturing a growing share of AI-driven activity.
Despite this competition, Post maintained that the technology conglomerate’s search engine continues to show healthy growth in traffic and revenue.
“So far, ChatGPT and other AI-based engines do not appear to be materially impacting Google search traffic or share, but could be capturing a healthy share of incremental AI-driven activity,” the analyst said.
However, BofA identified potential risks in 2025 that could impact Google’s performance. Among these are growing pressure on search traffic from emerging AI competitors, the potential impact of new OpenAI ads on Google’s search ad budgets, and possible negative implications from court rulings in the U.S. and EU that could affect long-term investor sentiment.
Wall Street’s take on GOOGL after Q4 2024 earnings
Indeed, BofA’s projection for Google adds to Wall Street analysts’ recent mixed outlook for the firm after the release of Q4 2024 earnings.
During the quarter, the technology giant reported $96.5 billion in revenue, slightly missing analyst expectations of $96.67 billion but exceeding EPS forecasts with $2.15, surpassing the expected $2.13.
For instance, JPMorgan (NYSE: JPM) lowered its price target from $232 to $220, citing weaker-than-expected revenue and operating income. The banking giant raised concerns that high CapEx and margin expansion uncertainty in 2025 may impact investor sentiment despite strong performance in Search and YouTube.
Morgan Stanley (NYSE: MS) also reduced its target from $215 to $210, noting that while Alphabet’s AI investments and product launches are strong, proving long-term revenue growth remains a challenge.
On a more bullish front, Goldman Sachs (NYSE: GS) raised its price target to $220, maintaining a ‘Buy’ rating. The bank cited strong Search and YouTube growth while noting Google Cloud’s underperformance due to supply constraints.
Raymond James also revised its target from $190 to $205, acknowledging strong Search and YouTube revenue but expressing concerns over Google Cloud’s performance and Alphabet’s high CapEx projections.
Alphabet AI investments
With the majority of analyst outlooks focusing on AI, it’s worth noting that Alphabet is making significant strides in this space to stay ahead of the growing competition.
Specifically, during the Q4 2024 earnings call, the company announced plans to spend $75 billion on capital expenditures this year, with a substantial portion allocated to enhancing its AI capabilities and infrastructure.
At the current state, AI remains a major catalyst for Alphabet’s growth in the long term. Still, in the short term, the stock remains susceptible to emerging headwinds, such as the ongoing Donald Trump tariffs that continue to rattle the market.
Featured image via Shutterstock
