Alphabet (GOOGL) Rides AI Overviews Wave--Analyst Forecasts Big Upside
June 27 - Alphabet (NASDAQ:GOOGL) got a rating tweak Friday, with Citizens JMP analyst Andrew Boone moving the stock to "Market Outperform" from "Market Perform" and setting a $220 price target, according to a Friday note to clients.
Boone pointed to the rapid rollout of Google's AI Overviews feature, now live in more than 200 countries and offered in over 40 languages, as a key catalyst. The generative AI tool delivers concise summaries of search results, aiming to boost user engagement.
In early tests, AI Overviews drove a 10% jump in search queries. Boone expects monthly active users to climb from about 1.5 billion in Q1 2025 to nearly 4 billion by Q3, covering roughly two-thirds of all searches. He argues this expansion should more than offset any share lost to competing chatbots.
The analyst also noted Google's vast scale, over 5 billion active users versus OpenAI's 800 million weekly, gives it an edge in monetizing AI-driven search improvements. AI is growing search use faster than ChatGPT is taking share, Boone wrote.
This article first appeared on GuruFocus.
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