Citi lifts Alphabet stock price target to $200 from $195

On Friday, Citi analysts demonstrated a positive outlook on Alphabet Inc. (NASDAQ:GOOGL), increasing the tech giant’s price target to $200 from the previous $195, while reiterating a Buy rating on the stock. Currently trading at $159.28, with a market capitalization of $1.95 trillion, Alphabet has shown robust performance with 13.87% revenue growth over the last twelve months. The adjustment comes after an evaluation of Alphabet’s first-quarter performance, which showed a 10% year-over-year growth in Search revenue.

The analysts noted Alphabet’s resilience in Search ads, the monetization evolution of YouTube through a mix-shift to direct response (DR), and expanding margins as reasons for their increased optimism. According to InvestingPro data, the company maintains excellent financial health with strong cash flows and a solid balance sheet. They acknowledged that challenges such as search competition, regulatory issues, and macroeconomic uncertainties remain, but also highlighted the robust nature of Google’s ad auction system, even in light of the slight impact to second-quarter revenue from changes to the de-minimis exemption.Want deeper insights? InvestingPro’s comprehensive analysis reveals 12 additional key tips about Alphabet’s financial strength and market position.

A significant point of interest for Citi was Alphabet’s advancements in artificial intelligence (AI), particularly the AI Overviews and AI Mode in Search, which they believe will continue to drive usage and monetization. The analysts expect this trend to persist for an extended period.

Additionally, the strong results in Search and Cloud were seen as positive indicators for other tech companies such as Meta Platforms Inc. (NASDAQ:META) and Amazon.com Inc. (NASDAQ:AMZN). Citi’s analysts also mentioned positive commentary on the Waymo Austin rollout, which they view as favorable for Uber Technologies Inc . (NYSE:UBER).

In summary, despite the headwinds facing the company, Citi’s analysts remain bullish on Alphabet shares, reflected in their decision to raise their price target while maintaining a Buy rating. Trading at a P/E ratio of 19.74, the stock appears reasonably valued relative to its growth prospects. This endorsement suggests confidence in Alphabet’s continued growth and innovation, particularly in the areas of AI and cloud services.Discover more with InvestingPro’s exclusive Fair Value analysis and comprehensive research report, part of our coverage of 1,400+ top US stocks.

In other recent news, Alphabet, the parent company of Google, reported first-quarter results that exceeded expectations, driven largely by the robust performance of its search advertising business. The company’s advertising revenue, which accounts for a significant portion of its total income, rose by 8.5% to $66.89 billion, surpassing analysts’ forecasts of a 7.7% increase. Alphabet attributed this growth to its investments in artificial intelligence, which are yielding positive results. Analysts have observed that Alphabet’s performance was stronger than anticipated, with Citigroup (NYSE:C)’s Ronald Josey noting the promising results in both search and cloud sectors. This positive outcome has also influenced other major tech companies, as Meta, Amazon, Tesla (NASDAQ:TSLA), and Nvidia (NASDAQ:NVDA) saw increases in their stock values. The interconnectedness of the tech industry was evident as these gains followed Alphabet’s report. Despite the positive news, Microsoft (NASDAQ:MSFT)’s and Apple (NASDAQ:AAPL)’s shares remained relatively stable. Overall, Alphabet’s results have contributed to a favorable sentiment in the tech market, highlighting the company’s ongoing strength.

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