Gold prices edge lower; heading for weekly losses ahead of U.S.-Russia talks
On Wednesday, Cantor Fitzgerald analyst Deepak Mathivanan adjusted the price target for Alphabet (NASDAQ:GOOGL), bringing it down to $159 from the previous $200, while maintaining a Neutral rating on the stock. The revision reflects expectations for Alphabet’s key performance indicators (KPIs), with projections for Search and YouTube (YT) revenues to be near high single digits year-over-year excluding foreign exchange impacts in the first quarter of 2025. According to InvestingPro data, Alphabet maintains a "GREAT" financial health score of 3.29, with robust revenue growth of 13.87% over the last twelve months. Cloud revenue growth is anticipated to exceed mid-20s percentage, a slowdown from 30% year-over-year growth witnessed in the fourth quarter of 2024.
The analyst highlighted that the earnings call will likely concentrate on April trends and management’s perspective on the impact of tariffs. While specific commentary is not expected from Alphabet, the company may acknowledge the increasing macroeconomic uncertainties. On the cost front, Alphabet is predicted to continue its commitment to multi-year efficiency initiatives alongside investments in artificial intelligence (AI). InvestingPro analysis shows the company holds more cash than debt on its balance sheet, with a healthy current ratio of 1.84x, suggesting strong operational efficiency.
Mathivanan’s analysis included a forecast for a deceleration in Search and YouTube revenue growth to approximately 3% year-over-year excluding foreign exchange impacts in the second half of 2025, indicating a potential market slowdown. The revised price target is based on 17 times the firm’s adjusted fiscal year 2026 earnings per share (EPS) estimate of $9.45, which is lower than the Visible Alpha consensus of $10.11. According to the analyst, the current valuation accounts for some macroeconomic impact, but shares could remain below the market multiple of approximately 18 times forward two years’ earnings if risks associated with AI become significant in the "Agent era." Based on InvestingPro’s Fair Value analysis, Alphabet currently appears slightly undervalued, with a PEG ratio of 0.5x suggesting attractive growth potential relative to its current P/E of 19.51x. Subscribers can access 8 additional ProTips and comprehensive valuation metrics in the Pro Research Report.
The report concluded with a reiteration of the Neutral rating and an updated price target of $159, down from the previous target of $200. This adjustment comes as Alphabet prepares to navigate through a landscape of economic uncertainties and increased focus on AI development and efficiency.
In other recent news, Anthropic has launched a new feature called Research, enhancing its AI assistant Claude. This feature allows Claude to conduct searches and provide answers quickly, and it is currently available in beta for specific plans in the U.S., Japan, and Brazil. Additionally, Anthropic announced a new integration with Google Workspace, enabling Claude to connect with Gmail, Google Calendar, and Google Docs. Meanwhile, Google has introduced a video creation feature using Veo 2 in its Gemini and Whisk platforms. This allows users to generate high-resolution videos from text prompts, available to Gemini Advanced and Google One AI Premium subscribers.
The rollout of Veo 2 is part of a broader effort to enhance video generation capabilities, with safety measures like digital watermarks embedded in generated videos. In a separate development, Google’s DolphinGemma model is helping scientists decode dolphin communication. Developed in collaboration with Georgia Tech and the Wild Dolphin Project, this AI model analyzes dolphin vocalizations and aims to create a shared vocabulary for interaction. Lastly, the Magnificent Seven stocks, including Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), and Amazon (NASDAQ:AMZN), saw gains due to potential tariff pauses and exemptions announced by the Trump administration. KeyBanc upgraded Apple, citing the tariff exemption as a positive development.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.