Citizens JMP Upgrades Alphabet (GOOGL) to Market Outperform

Citizens JMP analyst Andrew Boone upgraded Alphabet (NASDAQ: GOOGL) from Market Perform to Market Outperform with a price target of $220.00.

The analyst comments: "We believe OpenAI's 800M weekly active users compare to Google's 5B+ active users, and with AI Overviews becoming generally available in the U.S. as of May and leading to 10% query growth in testing, we believe AI is a net tailwind. Quantifying this, we see AI Overviews extending from 1.5B monthly users in 1Q25 to 4B by 3Q25 as AI Overviews will cover ~2/3 of queries by next quarter, per our estimates. Assuming Google's 10% query growth holds as AI answers a broader set of questions and offers better answers, we think Google may see a mid-single-digit query growth tailwind in 3Q25. This is offset by ChatGPT; however, we believe negative query growth is likely most severe for ChatGPT subscribers, which we estimate total just 20M in 2Q25 given OpenAI's $10B ARR disclosed in June, suggesting query growth can accelerate in 2Q25 and 3Q25 given wider distribution of AI Overviews. To be clear, this is likely to be more informational queries, though Google did note at Google Marketing Live that it is also seeing a positive impact from AI Overviews on commercial queries. Net/net, AI is growing the use of search at a faster rate than ChatGPT is taking share."

For an analyst ratings summary and ratings history on Alphabet click here. For more ratings news on Alphabet click here.

Shares of Alphabet closed at $170.68 yesterday.

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