J.P. Morgan analyst Doug Anmuth maintained a Buy rating on Alphabet Class C (GOOG – Research Report) today and set a price target of $220.00.
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Doug Anmuth has given his Buy rating due to a combination of factors, including Alphabet’s solid performance in its core advertising business, particularly in Search and YouTube. Despite a slight revenue shortfall in some areas, the steady growth in these segments indicates a strong underlying business model. Google’s continued investment in AI infrastructure and capacity expansion is seen as a strategic move that can drive future growth, despite the current pressure on margins due to increased capital expenditures.
Furthermore, Anmuth acknowledges the challenges posed by decelerating cloud revenue growth, which is attributed to capacity constraints rather than a lack of demand. He expects these issues to be resolved as Google brings more capacity online. While there are concerns over the sustainability of Google’s search growth and its high infrastructure spending, the company’s ongoing innovation in AI and robust advertising growth provide a positive outlook for its stock. Anmuth remains optimistic about Alphabet’s future performance, maintaining a favorable price target based on expected earnings growth.
In another report released today, TD Cowen also maintained a Buy rating on the stock with a $220.00 price target.