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Investing.com - Stifel raised its price target on Alphabet (NASDAQ:GOOGL) stock to $222.00 from $218.00 while maintaining a Buy rating following the company's first-quarter results. The tech giant, currently valued at $2.32 trillion, has seen 16 analysts revise their earnings estimates upward for the upcoming period, according to InvestingPro data.
The research firm cited "solid 1Q results with generally healthy advertising trends" across Search and YouTube, along with outperformance in the Cloud segment where both revenue and operating margins exceeded expectations. The company's overall revenue grew 13.07% in the last twelve months, demonstrating strong momentum across its business segments.
Alphabet management indicated that Cloud demand remains strong, with supply constraints expected to continue into 2026, prompting the company to increase its capital expenditure expectations by $10 billion for the year due to the current demand environment and increased backlog.
On the Search side, management reported that Paid Clicks (JO:CLSJ) increased by 4%, which Stifel noted helped alleviate concerns stemming from Apple (NASDAQ:AAPL) executive Eddy Cue's testimony during the Department of Justice proceedings, where he mentioned a decline in clicks.
Stifel observed that AI-related commentary from Alphabet remains positive, with the AI Overview feature driving more queries and monetization approximately on par with traditional Search, though the firm doesn't expect significant share price movement due to concerns about Alphabet's long-term AI position and ongoing Department of Justice issues.
In other recent news, Alphabet has reported strong second-quarter earnings, with revenue and operating income surpassing expectations. This performance has led several analyst firms to raise their price targets for the company. Evercore ISI increased its target to $240, citing the impressive earnings per share results. Similarly, Jefferies raised its target to $230, highlighting the progress in Alphabet's Cloud and AI sectors. BMO Capital also adjusted its target to $225 due to the company's robust performance across all areas in the second quarter. RBC Capital set its new target at $220, noting the AI-driven growth and broad revenue gains, excluding a one-time legal settlement. In addition to these financial updates, Google introduced Aeneas, a new AI model that aids in studying ancient Latin inscriptions. This tool enhances capabilities from previous models, offering advanced text and image processing for historical analysis. These developments underscore Alphabet's ongoing advancements and strategic investments in AI technology.
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