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On Wednesday, Evercore ISI, a prominent investment firm, maintained its positive stance on Alphabet Inc. (NASDAQ:GOOGL), reiterating an Outperform rating and a price target of $205.00. This aligns with the broader market sentiment, as InvestingPro data shows a strong analyst consensus rating of 1.58 and analyst targets ranging from $180 to $237. The firm’s analysts were impressed by the advancements presented at Google’s I/O 2025 event, noting significant progress in various areas of the company’s operations.
Google introduced the Gemini 2.5 family, which includes smarter and more affordable models, contributing to a 50-fold year-over-year increase in the company’s monthly AI token processing. The search engine giant, which maintains an excellent InvestingPro Financial Health Score of 3.3 (GREAT), has also updated its platform to show AI Overviews to 1.5 billion users per month and included an AI Mode tab that can handle extended, conversational-style inquiries.
The analysts highlighted the expansion of the Gemini application, which now offers a range of features beyond chat capabilities. These include free Gemini Live voice-plus-camera chat, Deep Research uploads, Canvas creation tools, and an Agent Mode. Furthermore, Google has broadened its technology stack with the launch of the TPU v7 Ironwood, which is ten times faster, and a new Android XR platform that supports Samsung (KS:005930)’s Project Moohan headset and lightweight Gemini-compatible glasses.
Evercore ISI expressed confidence in Google’s position in the artificial intelligence (AI) sector, stating that while there may not be a single AI winner, Google has demonstrated its capability to remain a leader in the race. The firm’s analysts were particularly encouraged by two major outcomes from the I/O event: Google’s continuous demonstration of high-level innovation and the observation that AI Overviews have increased "overview-type" search queries by approximately 10% in both the U.S. and India. This suggests that AI could potentially accelerate Google Search rather than disrupt it.
In their analysis, Evercore ISI emphasized their recommendation for investors to buy Alphabet shares, citing a price-to-earnings (P/E) ratio of 16 times for the year 2025, based on an expected compound annual growth rate (CAGR) of roughly 20% in earnings per share (EPS). According to InvestingPro, Alphabet currently trades at a P/E of 18.19x with a robust revenue growth of 13.07% over the last twelve months. The company appears slightly undervalued based on InvestingPro’s Fair Value analysis, with 12 additional ProTips and comprehensive financial metrics available to subscribers through the Pro Research Report.
In other recent news, Alphabet Inc. has made significant strides in artificial intelligence, as highlighted during its Google I/O developer conference. JPMorgan reiterated its Overweight rating and maintained a $195 price target for Alphabet, citing advancements in AI, including the Gemini model and AI Mode for Search. The company has also launched the NotebookLM mobile app for both Android and iOS, providing users with new features like offline Audio Overviews and interactive capabilities. In a related development, Uber (NYSE:UBER) has introduced early access to Waymo rides in Atlanta, a subsidiary of Alphabet, marking a step forward in autonomous vehicle technology. Meanwhile, Gene Munster of Deepwater Asset Management emphasized the importance of the Google I/O conference, focusing on how Google plans to monetize generative AI. Additionally, Bank of America analysts pointed out a shift in browser usage, with Google Chrome gaining market share over Safari, potentially impacting query volumes on Apple (NASDAQ:AAPL) devices. These developments reflect Alphabet’s ongoing efforts to lead in AI and technology innovation.
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