U.S. stocks steady; Cook’s dismissal, Nvidia earnings in spotlight
On Wednesday, KeyBanc Capital Markets maintained a positive outlook on Alphabet Inc. (NASDAQ:GOOGL), reiterating an Overweight stock rating and a price target of $225.00. The tech giant, currently valued at $2.4 trillion with a robust 14.4% revenue growth over the last twelve months, continues to impress analysts with its solid performance in areas such as Google Cloud and Waymo, as well as the potential for margin improvements. According to InvestingPro data, Alphabet maintains excellent financial health with strong cash flows and minimal debt. However, analysts noted that the Google Search segment faces challenges due to the ongoing Department of Justice (DOJ) trial and increasing competition.
Alphabet has been recognized for its significant product innovation in artificial intelligence and quantum computing, aiming to leverage these advancements in the 2025 outlook. With the company’s earnings report due on February 4, KeyBanc analysts believe that the company concluded the fourth quarter on a strong note and that the market’s forecasts for Google Cloud in 2025 are underestimated, with their projections being 3% higher than the consensus. InvestingPro subscribers can access detailed financial health metrics and 12 additional ProTips that provide deeper insights into Alphabet’s market position and growth potential.
Despite the positive aspects, the analysts expressed concerns about Google Search. They pointed out that Google must become more aggressive in distributing its Gemini product within its core Search platform to reach over 500 million Gemini users. The urgency for this action is compounded by the final DOJ hearings expected in the spring, which could cast a shadow over Alphabet’s annual May I/O event.
The potential impact of the DOJ’s decision, which is anticipated to be contested in court, could hinder Alphabet’s innovation and distribution efforts, leading to a loss of market share if not addressed promptly. Nonetheless, KeyBanc continues to see Alphabet as a company that will gradually appreciate in value due to positive revisions, although they believe the price target multiple remains limited for the time being. The $225 price target is based on a 22.1 times multiple of the firm’s estimated 2026 earnings per share.
In other recent news, Alphabet Inc. has been the subject of significant developments. Following the release of Alphabet’s fourth-quarter 2024 results, analysts from Needham and Truist Securities have maintained a Buy rating on Alphabet shares, with both firms setting a price target of $225. This reflects Alphabet’s strong performance, particularly in its Cloud business, which has shown significant growth.
Furthermore, Alphabet’s Google is taking steps to address fraudulent reviews, as announced by the UK’s Competition and Markets Authority (CMA). Google has committed to implementing sanctions to discourage businesses from profiting from deceitful reviews.
Alphabet is also under investigation by the CMA over potential dominance in mobile services, alongside Apple (NASDAQ:AAPL). In partnership news, Google is collaborating with Samsung Electronics Co (F:SAMEq). to develop augmented reality glasses.
In addition to these developments, Alphabet’s workforce has initiated an internal petition named "job security," expressing concerns over the company’s unstable environment. Finally, Alphabet faces potential challenges due to the emergence of DeepSeek, a Chinese AI company whose innovative approach could disrupt the current AI industry paradigm. These are recent developments impacting Alphabet Inc.
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