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On Wednesday, Cantor Fitzgerald analyst revised the price target for Alphabet shares, traded on (NASDAQ:GOOGL), to $210 from the previous target of $215. The firm maintained a Neutral rating on the stock. Ripps anticipates that Alphabet will slightly exceed expectations for fourth-quarter revenues and EBIT, attributing the performance to a relatively robust advertising market during the period. The increase in non-store sales, which rose by 9% in the fourth quarter compared to 7% in the third quarter, was driven by vigorous holiday shopping following the November 4 election in the United States.
Currently trading at $199.63, near its 52-week high of $203.84, Alphabet boasts a market capitalization of $2.43 trillion and impressive revenue growth of 14.38% over the last twelve months.InvestingPro analysis reveals 12 additional investment tips for Alphabet, including insights about its cash position and profitability metrics. Get the complete analysis with an InvestingPro subscription.
Despite the positive outlook for the fourth quarter, Ripps expressed reservations about constructing a convincing medium-term bullish case for Alphabet post-earnings release. The analyst pointed to ongoing antitrust uncertainties and risks associated with artificial intelligence as factors that make it challenging to take a more optimistic stance on the company's future.
Alphabet is recognized for its continuous advancements in various technological fields, including artificial intelligence, quantum computing, and autonomous vehicles. Nonetheless, the company's core business, which is predominantly its search engine, is currently confronted with multifaceted risks in 2025. These concerns have influenced the analyst's decision to retain a Neutral rating heading into the fourth-quarter earnings report.
The report also highlighted Alphabet's potential to realize increased EBIT due to fixed cost leverage, despite the street's margin expectations declining by 70 basis points quarter over quarter. This was attributed to favorable timing shifts. According to InvestingPro's Fair Value analysis, the stock appears slightly overvalued at current levels, though the company maintains strong fundamentals with a gross profit margin of 58.13%. However, the overarching sentiment remains cautious due to the aforementioned risks and uncertainties facing the company's main revenue-generating search business.
In other recent news, Alphabet has received a boost with BMO Capital Markets maintaining an Outperform rating and increasing the stock price target from $217 to $230. This optimism follows enhancements to Alphabet's Search and Google Cloud Platform (GCP), and the successful introduction of Performance Max (PMax) and Gemini technologies. Meanwhile, Alphabet's Google is planning to introduce an AI Mode to its search engine, a move that could significantly increase the user base of its Gemini AI chatbot.
Furthermore, Google's CEO Sundar Pichai aims to have the Gemini AI chatbot used by 500 million people by the end of 2025. Google's advancements in quantum computing technology have also been recognized, with Baird maintaining its Outperform rating and $205.00 stock price target for Alphabet Inc.
However, Alphabet is facing challenges. The company is under investigation by the UK's Competition and Markets Authority over its search services' potential impact on competition. Additionally, Google has been fined $75 million by Turkey's antitrust authority for engaging in anti-competitive practices, and is also anticipating penalties from a federal judge after being ruled as an illegal monopoly. Despite these issues, analysts from Stifel and Piper Sandler have maintained a positive outlook for Alphabet.
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