Wedbush expressed optimism about the announcements made by Alphabet Inc.’s GOOG GOOGL Google at its annual Cloud Next event. This comes after Wedbush added Google to its Best Ideas List (BIL) in March.
What Happened: Google unveiled a range of new products, features, and partnerships within its ecosystem, which "encouraged" the analysts at Wedbush.
Google Cloud CEO Thomas Kurian delivered the keynote, discussing the company’s advancements in AI capabilities and the commercialization of early enterprise solutions, including new custom chips.
Wedbush has maintained an "Outperform" rating for Google, with a target price of $175.
Google’s latest advanced model, Gemini 1.5 Pro, offers significantly larger context windows compared to its competitors. This model will power enterprise tools like Gemini Code Assist and other use cases across the Gemini family of models, which are expected to drive direct monetization.
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Wedbush points this out as one of the reasons behind its optimistic outlook for Google.
"We come away from the event encouraged by Google’s progress, both in developing its AI capabilities and commercializing early enterprise solutions with new custom chips announced (Axion) and a long list of generative AI services and features within Google Cloud that should support growth over a multi-year period."
See Also: OpenAI Rolls Out ‘Majorly Improved’ GPT-4 Turbo Model Just As Google’s Gemini Gets A Boost
The company’s competitive positioning is further supported by its extensive data resources, AI-optimized compute infrastructure, access to leading engineering talent, and close integrations with partners across all layers of the generative AI stack.
"We continue to highlight the strength of Alphabet’s competitive positioning more broadly, supported by an unmatched breadth of data to develop and train AI models," Wedbush added, noting that access to top AI talent is another reason behind its positive outlook.
Why It Matters: The AI revolution and improving ad spending are expected to be the catalyst for a 15% rally in tech stocks in 2024, with Google being a key player in this transformation, according to Wedbush’s Dan Ives.
However, despite this, the AI revolution's economic impact is still several years off, according to Goldman Sachs analysts Joseph Briggs and Devesh Kodnani.
Google also bagged the title of America's "Most Innovative Company" for the second consecutive year, according to Fortune and Statista.
Price Action: On Wednesday, Google's shares were down 0.97% in premarket trading after closing at $158.14 on Tuesday, according to Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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