Alphabet’s (NASDAQ:GOOGL) Cloud Next event might have been completely overshadowed by Trump’s announcements of a 90-day pause to his global tariff scheme, but for those following proceedings there was plenty to savor.
Baird’s Colin Sebastian, an analyst ranked in the top 3% of Wall Street stock experts, was there to take in the keynote and came away impressed with what he heard. “Overall,” said the 5-star analyst, “we believe Google hit the right notes, providing services that can drive more consumption of GCP infrastructure and reinforcing the company’s strong position in AI/GenAI, including improved access to key GenAI tools and models, enabling greater creation and adoption of AI agents, boosting integration with Workspace, and likely creating new revenue streams.”
Key highlights included the introduction of Cloud WAN, an on-premise AI collaboration with Nvidia and next-generation TPUs designed to support advanced Gemini workloads and processor-heavy reasoning models.
Google also announced that machine learning platform Vertex AI now offers access to over 200 models, including Llama, Claude, and others, while also revealing that more than 4 million developers are now using Gemini. That is a “strong number” compared to last year’s ~1 million and suggests that Google is “successfully competing with other CSPs in AI services.”
Furthermore, the number of Vertex AI users has grown 20-fold, partly due to the increased use of image and video generation models. In Google Workspace, over two billion AI assists have been delivered to business users.
The demos which impressed Sebastian the most featured the introduction of enterprise AI agents via Vertex AI, enabling users to build multi-agent systems within their organizations. These systems allow users to maintain control over their data and customize workflows to suit their specific job functions.
Regarding Google’s data center network, the analyst considers it to be an “underappreciated asset” that offers a “competitive advantage.” For instance, it enables near-real-time search results, ensures YouTube’s reliability, and supports a highly scalable, responsive, and unparalleled advertising engine.
This “near-zero latency network” is now being offered to enterprise clients, representing part of a broader strategy to make Google’s technology infrastructure accessible to other companies.
Lastly, the focus on security is evident, with Google’s $32 billion acquisition of Wiz highlighting the company’s ambition to be “best-in-class in terms of cybersecurity.” The announcement of Google Unified Security marked another step toward becoming a leader in the field. This new feature integrates various functions, such as AI-powered security operations, AI alert agents, and enterprise security, into a single solution.
So, down to business, what does all this ultimately mean for investors? Sebastian maintained an Outperform (i.e., Buy) rating on the shares alongside a $190 price target. There’s potential upside of 22.5% from current levels. (To watch Sebastian’s track record, click here)
Most other analysts agree with that stance although not conclusively so. Based on a mix of 27 Buys vs. 10 Holds, the stock claims a Moderate Buy consensus rating. At $206.82, the average target suggests shares will gain 33.5% over the one-year timeframe. (See Alphabet stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.