Alphabet (GOOG, GOOGL) remains a “clear” beneficiary of generative artificial intelligence amid the persistence of longer-term debates related to the technology, Wedbush Securities said in a note Friday.
“We think Google benefits from structural search and generative-AI advantages that insulate the company from competitors,” Wedbush said.
The firm noted that Alphabet shares have trailed mega cap peers Amazon.com (AMZN) and Microsoft (MSFT) and the broader Nasdaq index year-to-date following Q4 results and the recent controversy related to historically inaccurate images generated by its AI model Gemini.
“We think the setup has become more attractive in recent weeks with a reversal in sentiment emerging,” Wedbush said. “Specifically, we are encouraged by comments made during the company’s public appearance at an investor conference… regarding generative AI and Google Search, in addition to media reports earlier this week indicating that Google and Apple (AAPL) are in negotiations to integrate Gemini in upcoming iPhone software updates.”
The firm added Alphabet to its “Best Ideas List,” lifted the price target to $175 from $160 and maintained the outperform rating.
Alphabet was up more than 2% in recent trading.