Alphabet's recent financial results and increased AI investments have sparked positive reactions from analysts. UBS raised its price target for Alphabet, citing strong performance in search, YouTube, and cloud services. Alphabet's second-quarter report showed better-than-expected revenue and earnings, driven by a 13.8% year-over-year revenue increase to $96.4 billion.
The company's commitment to AI is evident in its increased capital expenditure guidance for 2025, now at $85 billion, to support AI infrastructure. Google Cloud's revenue reached $13.6 billion, with significant growth in backlog, driven by enterprise demand. YouTube is also showing strong monetization potential, with Shorts generating comparable revenue per watch hour to traditional in-stream ads.
Despite positive indicators, UBS maintains a neutral rating due to regulatory uncertainties and potential market share loss in search. However, other analysts are more bullish, with some raising their price targets and highlighting Alphabet as an 'AI winner'. Overall, Alphabet's focus on AI and strong financial performance suggest a positive outlook, though regulatory challenges remain a key consideration.
