Intel stock spikes after report of possible US government stake
Investing.com - Citizens JMP upgraded Alphabet (NASDAQ:GOOGL) from Market Perform to Market Outperform on Friday, setting a price target of $220.00. The tech giant, currently valued at $2.11 trillion, trades at a P/E ratio of 19.2x with a notably low PEG ratio of 0.5x, suggesting attractive valuation relative to its growth potential.
The upgrade comes as Citizens JMP believes AI is becoming a net tailwind for Google rather than a threat, noting that OpenAI’s 800 million weekly active users compare to Google’s more than 5 billion active users. This massive user base has helped drive robust revenue growth of 13% year-over-year, according to InvestingPro data.
The firm highlighted that AI Overviews, which became generally available in the U.S. in May, led to 10% query growth in testing and is expected to expand from 1.5 billion monthly users in the first quarter of 2025 to 4 billion by the third quarter of 2025.
Citizens JMP estimates AI Overviews will cover approximately two-thirds of queries by next quarter, potentially generating a mid-single-digit query growth tailwind in the third quarter of 2025, despite competition from ChatGPT.
The research firm noted that while ChatGPT is taking some search share, its subscriber base is estimated at just 20 million in the second quarter of 2025, based on OpenAI’s $10 billion annual recurring revenue disclosed in June, suggesting Google’s query growth can accelerate in both the second and third quarters of 2025.
In other recent news, Google’s DeepMind has introduced AlphaGenome, an AI tool designed to predict the impact of genetic variations in human DNA on gene regulation. This tool, which can analyze up to 1 million DNA base pairs, is currently available for non-commercial research and has shown superior performance in various evaluations compared to existing models. Additionally, Google has launched Gemini CLI, a free and open-source AI tool for developers that integrates directly into terminals, offering extensive capabilities for coding and task management. Meanwhile, Waymo, a subsidiary of Alphabet, plans to begin data collection in New York City, marking its first operation in this complex urban environment and presenting challenges like snowy conditions for autonomous vehicles. In regulatory developments, Turkey’s antitrust board is investigating Google’s "Performance Max" ad campaign to assess potential misuse of market position in online advertising. Furthermore, an adviser to the EU’s highest court has sided with regulators in Google’s appeal against a €4.3 billion fine related to its Android operating system, recommending that the appeal be dismissed.
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