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Investing.com - Needham has raised its price target on Alphabet (NASDAQ:GOOGL) to $260.00 from $220.00 while maintaining a Buy rating on the stock. The stock, currently trading near its 52-week high of $214.65, has delivered a robust 27% return over the past six months. According to InvestingPro data, 30 analysts have recently revised their earnings estimates upward for the upcoming period.
The price target increase follows Judge Mehta’s release of preliminary remedies related to the Department of Justice vs. Alphabet Search case, which was decided in favor of the DOJ in August 2024.
Needham noted that the preliminary remedies outlined in the 200+ page document were "far better for GOOGL than we (and our network of DC experts) had expected."
The firm believes the decision will save Alphabet $5 billion to $10 billion annually in lower revenue share fees paid to Apple and other distributors, while allowing Apple to work with Gemini, Alphabet’s large language model.
Needham also indicated the ruling lowers the risk of structural remedies being applied in the next DOJ vs. Alphabet trial concerning AdTech, prompting the firm to raise its estimates for fiscal years 2025 and 2026, introduce estimates for 2027, and roll forward its valuations.
In other recent news, several investment firms have updated their outlook on Alphabet. KeyBanc Capital Markets increased its price target for Alphabet to $265, citing a favorable Department of Justice ruling as a positive development. Barclays also raised its price target to $250, noting that legal risks have diminished, which echoes past situations where Alphabet’s valuation expanded significantly. Wedbush adjusted its target to $245, highlighting reduced regulatory risks and maintaining an Outperform rating. Goldman Sachs reiterated its Buy rating with a $234 price target, analyzing the impacts of court remedies related to Google’s search antitrust case. DA Davidson raised its price target to $190, focusing on the strength of Google’s Tensor Processing Units in the AI accelerator market. These updates reflect a generally positive outlook from analysts regarding Alphabet’s future performance amidst recent legal and technological developments.
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