Goldman Sachs lifts Alphabet stock price target to $220

On Wednesday, Goldman Sachs made an adjustment to Alphabet (NASDAQ:GOOGL)’s stock outlook, with analyst Eric Sheridan increasing the price target to $220 from $215, while maintaining a Buy rating on the shares. With a market capitalization of $2.53 trillion, Alphabet remains one of the world’s most valuable companies. This decision follows Alphabet’s fourth-quarter 2024 earnings report, which highlighted several significant trends. According to InvestingPro data, the stock is currently trading near its 52-week high of $207.05.

Alphabet, the parent company of Google, demonstrated robust growth in its Search and YouTube segments, achieving an impressive 14.38% year-over-year revenue growth. However, growth in Google Cloud was less than anticipated, with the management citing supply and capacity constraints as the primary reasons for this shortfall. InvestingPro analysis shows the company maintains excellent financial health with a "GREAT" overall score, supported by strong cash flows and solid balance sheet metrics.

The management at Alphabet also provided an unusually detailed forecast on capital expenditures and depreciation for the year, indicating continued investments to expand capacity for AI-related demand. They emphasized a balance between long-term investments in AI, which are expected to remain high, ongoing cost efficiencies, and capital returns. The company’s strong financial position is evident in its impressive 32% return on equity and robust profit margins. Discover 13 additional key insights about Alphabet’s financial strength with InvestingPro, including exclusive Fair Value analysis and comprehensive Pro Research Reports.

Alphabet’s management expressed a long-term optimistic outlook on the evolution of their Search product, positive sentiments regarding their role in broader digital media consumption trends, and a strategy for Google Cloud to capitalize on the emerging generative AI theme and a more normalized enterprise computing environment.

Goldman Sachs’ revised price target reflects confidence in Alphabet’s strategic positioning, especially in the context of AI, which is anticipated to play a pivotal role in shaping both the current and future computing landscapes.

In other recent news, Intel Corporation (NASDAQ:INTC) faces potential antitrust investigations by China’s State Administration for Market Regulation (SAMR), as reported by the Financial Times. The probe is part of a larger revival of antitrust investigations into major US tech firms, including Google and Nvidia (NASDAQ:NVDA). This comes amid escalating geopolitical tensions between China and the US.

In the meantime, Alphabet Inc. has had its stock price target raised by Bernstein analysts at SocGen Group to $210 from $185, maintaining a Market Perform rating. The adjustment reflects expectations for steady growth in Google Search and potential upside from other segments. Alphabet’s cloud services are also highlighted as a key factor for the company’s appeal.

Alphabet’s stock price target was also raised to $225 by Oppenheimer, maintaining an Outperform rating. The increase reflects a positive outlook on the company’s advertising trends and its positioning within the AI space. Alphabet’s search engagement metrics have shown resilience, with consistent growth in both the number of clicks and cost-per-click across the first three quarters of the year.

In the ride-hailing sector, Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) shares fell sharply following Waymo’s announcement of plans to expand its testing operations to 10 new cities by 2025. Waymo, owned by Alphabet Inc., aims to assess how well its self-driving system can adapt to different environments, traffic patterns, and weather conditions.

Lastly, Chinese AI startup DeepSeek’s chatbot has struggled in delivering accurate news and information, achieving a mere 17% accuracy rate according to a recent audit by NewsGuard. Despite these challenges, DeepSeek’s chatbot quickly became the most downloaded app in Apple (NASDAQ:AAPL)’s App Store shortly after its launch.

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