Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Needham has raised its price target on Alphabet (NASDAQ:GOOGL) stock to $210.00 from $178.00 while maintaining a Buy rating. Currently trading at $182, the company maintains a "GREAT" overall financial health score according to InvestingPro data, with particularly strong marks in profitability and cash flow management.
The firm cites Alphabet’s strong strategic position in digital advertising, where the company commands over 40% of global digital ad spending with approximately $265 billion in global advertising revenue in 2024, according to eMarketer data referenced in the report. This dominance is reflected in Alphabet’s robust financial performance, with revenue reaching $359.7 billion in the last twelve months and maintaining a healthy 58.6% gross profit margin.
YouTube’s dominance in the streaming landscape represents another key strength, with the platform accounting for 12.5% of total streaming viewing in May 2025, making it the most-streamed service in the United States according to Nielsen Gauge measurements. NFL Sunday Ticket is also driving rapid growth in YouTube subscription revenue.
Needham identifies generative AI as Alphabet’s primary upside valuation driver over the next 3-5 years, highlighting the company’s proprietary large language models (LLMs) as significant assets. The firm expects generative AI to enhance Alphabet’s internal operations while adding to revenue growth through Google Cloud Services.
The research note emphasizes that Alphabet’s Search and YouTube platforms provide its Gemini LLM with competitive advantages by supplying the millions of data points needed daily to train these AI systems, creating what Needham describes as a "deep moat" for the company. According to InvestingPro analysis, Alphabet shows signs of being slightly undervalued at current levels, with 11 additional ProTips available to subscribers, including insights on the company’s cash position and growth metrics. Discover comprehensive analysis and Fair Value estimates for over 1,400 stocks with an InvestingPro subscription.
In other recent news, Advanced Micro Devices (NASDAQ:AMD) announced it can resume shipping its MI308X AI GPU to China, following a review by the U.S. Department of Commerce. This development is significant as AMD had previously estimated a potential $1.5 billion revenue impact due to export restrictions. Meanwhile, Rivian Automotive (NASDAQ:RIVN) has partnered with Google to integrate Google Maps into its navigation system, enhancing its in-vehicle technology offerings. Google is also making strides in cybersecurity, with its AI agent Big Sleep successfully detecting and preventing a security exploit. Additionally, BMO Capital has raised its price target for Alphabet to $208, citing optimism about Google’s AI products and increased spending from advertisers. In acquisition news, Cognition has agreed to acquire AI coding startup Windsurf after a failed deal with OpenAI, with key Windsurf executives joining Google. These developments highlight significant movements in the tech industry, particularly in AI and partnerships.
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