Alphabet stock price target lowered to $195 at TD Cowen

On Friday, TD Cowen maintained a Buy rating on Alphabet (NASDAQ:GOOGL) Inc. (NASDAQ:GOOG) but lowered the price target from $210.00 to $195.00. Currently trading at $152.06, near its 52-week low of $148.20, InvestingPro analysis suggests the stock is slightly undervalued. The adjustment follows a digital ad expert call that indicated Alphabet’s search spend growth remained solid in the first quarter of 2025, without a clear sign of macroeconomic pullback.

The firm’s first-quarter net revenue estimate for Alphabet is up 12.4% year-over-year, slightly above consensus by 0.4%. This aligns with the company’s strong recent performance, showing 13.87% revenue growth over the last twelve months. Their operating income and EPS estimates are also higher than consensus, by 5.6% and 4.5%, respectively. Despite these positive indicators, TD Cowen has revised its revenue, operating income, and EPS forecasts down by approximately 1% for 2025 and between 2-3% annually from 2025 to 2030. InvestingPro subscribers can access 10+ additional exclusive insights about Alphabet’s financial health, which currently rates as "Great" with a score of 3.21.

The revisions by TD Cowen are attributed to weakening consumer sentiment and tariff impact concerns. The Conference Board index reported that consumer sentiment has declined for four consecutive months through March 2025, reaching its lowest levels since January 2021. Additionally, near-term demand challenges are evident from statements by companies such as FedEx (NYSE:FDX) and Walmart (NYSE:WMT), as well as softer outlooks from airlines. Despite these concerns, Alphabet maintains robust financials with a P/E ratio of 18.85 and strong market position with a $1.85T market cap.

In the analyst’s words, "Given tariff and consumer sentiment softening, we cut rev / Op Inc / EPS ~1% in ’25E and 2-3% annually (avg) ’25E-’30E. We trimmed our estimates ’25-’30 given weakening consumer sentiment, as reflected by tariff impact concerns and negative indicators including i) Lower consumer sentiment (per Conference Board index), which is down 4 straight months through Mar ’25, the lowest levels since Jan ’21; and ii) Challenges to near-term demand per FedEx, Walmart, among others, as well as softer outlooks from the airlines. PT to $195, maintain Buy." The revised price target reflects these concerns while still endorsing Alphabet’s stock with a Buy rating. Investors should note that Wall Street maintains a strong bullish consensus on GOOG with a 1.57 rating, and the company’s next earnings report is scheduled for April 29, 2025.

In other recent news, Google has announced changes in its AI leadership, particularly within its consumer AI applications division. Sissie Hsiao, who led the AI chatbot project Gemini, will be stepping down, with Josh Woodward (NASDAQ:WWD) taking over the role. This shift is part of Google’s strategy to focus on the next evolution of the Gemini app. Meanwhile, Roblox has introduced a new video advertising format and formed a partnership with Google to expand its advertising business. This initiative aims to diversify Roblox’s revenue streams and make its ad offerings more accessible.

Lockheed Martin (NYSE:LMT) has teamed up with Google Cloud to integrate advanced generative AI capabilities into its AI Factory ecosystem. This collaboration is intended to enhance Lockheed Martin’s ability to deploy and maintain high-performance AI models for national security and aerospace applications. In the financial sector, BofA Securities has maintained its Buy rating on AppLovin (NASDAQ:APP), setting a price target of $580. Despite recent claims by Muddy Waters about potential risks, BofA Securities remains confident in AppLovin’s market position and growth potential.

Additionally, Google has aligned YouTube Shorts’ view-counting methodology with TikTok and Instagram Reels. Starting March 31, 2025, YouTube Shorts will track views based on video starts or replays, which aims to provide creators with more accurate performance insights. This change is not expected to affect creators’ earnings or eligibility for the YouTube Partner Program.

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