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Billionaires Are Loading Up on This AI Stock That Has 20% Upside According to This Wall Street Expert

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At $184, the stock looks inexpensive to me. It is up 25% this year and has the potential to continue soaring through 2025.
When it comes to Artificial Intelligence, Alphabet wasn’t the one to sit back and watch. It has adopted AI across multiple platforms and its Gemini AI platform has seen usage across multiple industries. Gemini is also a part of several advertising services offered by the company and has become the go-to for advertisers who are developing ad campaigns. Another successful AI integration is in the cloud computing segment which has seen a 30% year-over-year revenue jump this quarter. However, it was lower than expected, which has led to a 7% drop in the stock post earnings.
The company will spend $75 billion in capital expenditure to accelerate the AI initiatives. AI will impact Alphabet’s ability to grow in the Search and advertising segment. It has already integrated features like Google Lens and Circle into its Search engine which has made it easier and convenient for individuals to search for things. Search is also the biggest source of ad revenue for the company since marketers pay a huge amount to ensure that they remain at the top of the search results. With AI, search will continue to improve and Alphabet will keep growing.
The company’s advertising business is also firing on all cylinders as it remains one of the top search engines globally. Google Search has about 90% share of the total internet search and those willing to reach out to customers will be ready to pay a premium to place an ad on the site. In the recently announced quarterly results, the company’s total revenue jumped 12% year-over-year to $96.5 billion while the net income was up 28%. Google cloud revenue jumped 30% year-over-year to $12 billion and the services revenue soared 10% to $84.1 billion.
Google Cloud is one of the most profitable segments of the company. With the implementation of generative AI into Google Cloud, this segment will keep expanding. I believe Cloud and YouTube will be the next big things in 2025.
Bernstein analyst has increased the price target of the stock to $210 with a market performance rating. The analyst is of the opinion that YouTube and Google Search will continue to grow and the cloud services segment could turn the company into an AI winner. Oppenheimer analyst has a price target of $225 with a buy rating.
KeyBanc Capital Markets has an overweight rating with a price target of $220. Bank of America has also raised the price target to $225 from $210 and maintained a positive outlook.
Alphabet is a very strong business with a global presence and the ability to keep evolving with time. Looking at the strength of the company’s business, the shares look cheap and the long-term picture looks attractive. I believe Alphabet is one stock to buy and never sell.
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