Jefferies said Alphabet (nasdaq:GOOGL) is still challenging in its fourth quarter. Weak ad spend and foreign exchange headwinds resulted in a lower single-digit margin than expected in the advertising segment, but overall revenue was in line with expectations due to hardware and YouTube subscription growth. The bank is encouraged by the company’s increased focus on costs and monetization of AI assets. The bank said that the group’s core search business can still attract increased advertising revenue as it shifts to digital and mobile, and Google Cloud will be another breakthrough for the group as YouTube is the best platform to take advantage of online video. The bank raised its price target by 21% to $130 with a buy rating.