MoffettNathanson suggests Alphabet Inc. is poised to become the world's most valuable company, citing its robust position in artificial intelligence and other key sectors. The firm highlights Alphabet's leadership in multimodal search, accelerated cloud growth, improved YouTube monetisation, and the emergence of Waymo as key factors. They also raised their price target for Alphabet to $295, maintaining a Buy rating.
The firm believes major concerns surrounding the U.S. search antitrust case and ChatGPT are diminishing. Judge Mehta's recent ruling imposed lenient remedies, and Google's AI initiatives are closing the gap with OpenAI. Early data indicates that GenAI-enabled chatbots are expanding usage without negatively impacting traditional search.
MoffettNathanson acknowledges that Alphabet has been gradually losing advertising market share to Meta and Amazon. However, they view recent market share losses as relatively unexceptional. They also suggest that concerns about Alphabet's approach to cost management may not fully reflect the company's ongoing efforts and potential for growth.
