This article first appeared on GuruFocus.
Wall Street is offering another vote of confidence in Alphabet Inc. (GOOGL, Financials), the parent firm of Google, which is a key player in advertising, cloud computing and artificial intelligence.Shares climbed in premarket trade after Evercore ISI analyst Mark Mahaney boosted his price objective to $450 from $420, citing new data showing Google’s search position has rebounded.In its most recent poll, Evercore revealed that 78% of respondents said they used Google as their preferred search engine in August. That’s up from a low of 70% in 2024 and early 2025.This change significant because AI-powered search has been one of the major risks that investors have dreaded. Instead, Mahaney said Google’s search leadership has improved over the last year and he boosted his expectations for Google’s search revenue through 2028.Now, his sales and operating income estimates for 2028 are 4% to 5% above the Wall Street consensus.Alphabet also benefited from a Sept. 16 court verdict that fell short of requiring Google to divest its ad-tech division. The corporation has been ordered to adjust its advertising tactics and to allow monitoring for six years.Tigress Financial also increased its price target to $485 from $415.The next question is whether increased search use and AI investment can convert into sustainable earnings growth as Alphabet faces stricter scrutiny and higher spending.
