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 raised its price target on GOOGL to $185 from $172, maintaining an outperform rating on the stock. Analysts told investors that after surveying consumers about search/AI user behavior, they believe Alphabet shares remain attractive ahead of first-quarter results.
Additionally, the firm cited Gemini’s potential upgrade at the May Google I/O event, the NASDAQ discount and mixed/bearish investor sentiment as other factors influencing its bullish thesis.
“Our research shows that search remains the best way to meet consumer needs, with genAI being a complement to, not a replacement for, search, and survey also
indicates that Google’s dominance in search will continue if the government terminates AAPL’s exclusivity agreement,” Oppenheimer said.
Additionally, the analysts said the results show that the potential GOOG/AAPL Gemini integration will significantly increase search volume: “53% of respondents indicated they would use voice search more often than text search today.”
META’s price target was raised to $585 from $525, with analysts saying they were raising their ratings on stocks with an “outperform” rating to “consider AI tailwinds and historical seasonality.”
AI is “enabling revenue growth,” Oppenheimer said. “While historical seasonality still suggests upside to 2H24, our model now suggests 337 bps. share gains compared to the 6-year average of 305 bps. (excluding the impact of IDFA ’21-22), which indicates significant growth is built in.”