Oppenheimer analysts raised their price targets for Alphabet (NASDAQ:) and Meta Platforms (NASDAQ:) in separate notes Monday based on generative artificial intelligence tailwinds.
The firm lifted its GOOGL price target to $185 from $172, maintaining an Outperform rating on the stock. Analysts told investors that following its consumer survey on Search/AI user behavior, they think Alphabet shares remain attractive ahead of 1Q results.
Furthermore, the firm pointed to the company’s potential Gemini update at the May Google I/O event, the discount to NASDAQ, and mixed/bearish investor sentiment as other factors driving its bull thesis.
“Our survey indicates search remains the best at satisfying consumer use cases, with genAI a complement vs. substitute to search, and survey also
indicates Google’s search dominance would continue if government ended AAPL exclusivity agreement,” said Oppenheimer.
In addition, analysts said the results suggest a potential GOOG/AAPL Gemini integration would meaningfully increase the number of searches, “with 53% of respondents indicating they would use voice search more than text search today.”
The META price target was raised to $585 from $525, with analysts stating that they are raising estimates for the Outperform-rated stock to “incorporate AI tailwinds and historical seasonality.
AI is “driving revenue upside,” stated Oppenheimer. “While historical seasonality still suggests upside to 2H24, our model now implies 337bps of share gains vs. 6-year average of 305bps (ex ’21-’22 IDFA impact), indicating significant gains built-in.”
