Cantor Fitzgerald maintains Alphabet stock Overweight rating, $200 target

On Tuesday, Cantor Fitzgerald maintained its Overweight rating on Alphabet shares (NASDAQ:GOOGL) with a constant price target of $200.00. According to InvestingPro data, Alphabet, with its $2.06 trillion market cap, maintains a "GREAT" financial health score and holds more cash than debt on its balance sheet, positioning it strongly among its peers. The firm’s analyst, Deepak Mathivanan, highlighted three main risks that could potentially impact Alphabet’s market performance. The first concern is that the proposed remedies from the ongoing Search trial might significantly reduce Alphabet’s Search market share or its economics within the iOS ecosystem, which could negatively affect the company’s revenue and earnings per share (EPS).

The second risk involves Alphabet’s investments in artificial intelligence (AI). While these investments are expected to increase, the return on invested capital (ROIC) remains uncertain. However, InvestingPro data shows Alphabet’s current ROIC stands at 29%, with a robust revenue growth of 13.87% over the last twelve months. The analyst suggests that it is not clear how these AI investments will pay off in the long run, posing a risk to Alphabet’s financial outlook.

The third risk outlined by the analyst is the potential impact of a macroeconomic slowdown. Such a slowdown could particularly affect Alphabet’s YouTube and Search revenues, especially in certain industry verticals that may be more sensitive to economic shifts.

Despite these risks, Cantor Fitzgerald has not changed its positive stance on Alphabet, as reflected in the reaffirmed Overweight rating and price target. The firm’s analysis suggests that while there are challenges ahead, the potential rewards at the current stock price may justify the risks for investors.

The $200.00 price target set by Cantor Fitzgerald indicates the firm’s confidence in the value and growth prospects of Alphabet shares. This target remains unchanged despite the identified risks, suggesting that the firm believes the company has the capability to navigate through potential obstacles and continue to grow.

In other recent news, Alphabet’s self-driving unit, Waymo, announced plans to launch a fully autonomous ride-hailing service in Washington, D.C. in 2023. The company is actively working with policymakers to establish the necessary legal framework for operating autonomous vehicles in the city, where current laws do not permit fully autonomous operations. Additionally, Google has introduced an AI-powered search feature to Gmail, designed to provide users with faster and more relevant email search results. This feature is currently being rolled out globally for users with personal Google accounts, with plans to extend it to business users in the future.

In another development, Google’s Senior Director of Competition, Oliver Bethell, criticized the European Union’s competition rules, arguing they negatively impact consumers and businesses by hindering innovation and weakening security. Meanwhile, Google Wallet has introduced a new feature that allows children to make digital payments under parental supervision in several countries, including the U.S. and the U.K. Parents can track purchases and manage their children’s Wallet experience through the Family Link feature. These initiatives reflect Google’s ongoing efforts to enhance user experiences across its platforms.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.