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On Wednesday, JPMorgan reiterated its Overweight rating on Alphabet stock (NASDAQ:GOOGL), maintaining a price target of $195.00. The affirmation comes after Google’s annual developer conference, Google I/O, where the company showcased its advancements in artificial intelligence (AI). The tech giant, currently valued at $2 trillion, trades at a PEG ratio of 0.48, suggesting an attractive valuation relative to its growth potential. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimate.
The conference highlighted Google’s AI capabilities, particularly its Gemini model, which leads foundational model leaderboards. JPMorgan noted the introduction of AI Mode in Google Search, leveraging Gemini along with other AI products like Astra, Mariner, and Deep Research. This feature is already rolling out to U.S. users, marking a significant step in what JPMorgan describes as Google’s "total reimagining of search." The company’s strong financial position, with a "GREAT" Financial Health score on InvestingPro and revenue growth of 13%, supports its ambitious AI initiatives.
The analyst praised Google’s product innovation, emphasizing that the company is shipping products faster than ever before. The integration of Google’s various AI technologies into a cohesive search experience was seen as a positive development. The upcoming Google Marketing Live event, focusing on monetization strategies, was also mentioned as an area of interest. With a return on equity of 35% and robust profit margins, Alphabet demonstrates strong operational efficiency. Discover more insights about Alphabet’s financial performance and 12+ additional ProTips with InvestingPro.
JPMorgan’s confidence in Google’s ability to lead the transition to AI-powered search was bolstered by the developments presented at the conference. The price target set for December 2025 is based on approximately 20 times the firm’s estimated 2026 GAAP EPS of $9.60. The current trading price of Alphabet stock is around 17 times JPMorgan’s estimated 2026 GAAP EPS, which is noted as a discount compared to the five-year average of 21 times. The stock currently trades at a P/E ratio of 18.19x, supporting JPMorgan’s valuation assessment.
In other recent news, Alphabet Inc. has been at the center of attention with several significant developments. KeyBanc Capital Markets maintained an Overweight rating on Alphabet, setting a price target of $195. This decision follows the Google I/O 2025 event, where Alphabet showcased its latest AI integration, Gemini 2.5, which is expected to enhance usage and monetization opportunities. Meanwhile, BMO Capital Markets reaffirmed its Outperform rating and a $200 price target for Alphabet, supported by a survey indicating strong consumer loyalty to Google Search despite increasing competition from AI-driven tools. On the other hand, JMP Securities and Citizens JMP both maintained a Market Perform rating, citing concerns over the ongoing U.S. search antitrust trial and potential structural challenges in search revenue. Additionally, Alphabet launched the NotebookLM mobile app for Android and iOS, offering users enhanced features like offline audio overviews and interactive capabilities. These developments reflect Alphabet’s continued focus on AI and digital innovation, while analysts remain divided on the company’s ability to navigate regulatory and competitive hurdles.
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