Alphabet Analyst Says 2025 ‘Pivotal’ Year For Stock As Opportunities And Challenges Abound: Retail Sentiment Brightens

BofA’s Justin Post said 2025 could establish Alphabet as an artificial intelligence leader or expose the company to elevated search disruption.

Alphabet Analyst Says 2025 ‘Pivotal’ Year For Stock As Opportunities And Challenges Abound: Retail Sentiment Brightens

Alphabet stock fell modestly in late afternoon trading on Tuesday amid the sell-off in tech stocks. Additionally, an analyst at BofA Securities issued cautious commentary regarding the 2025 outlook.

BofA analyst Justin Post reiterated a ‘Buy’ rating on Alphabet but raised the price target to $225 from $210 due to the firm rolling forward its valuation basis to 2026. The updated price target offers nearly 18% upside potential.

Post said 2025 is a “pivotal” year for Alphabet. The year could establish the company as an artificial intelligence (AI) leader or expose the company to elevated search disruption, he added. 

The analyst noted that Alphabet stock posted an above-market gain of 35% in 2024, benefiting from new product launches, strong cost discipline, improving Cloud growth, and positive estimate revisions. 

However, it underperformed FANG peers due to the threat of AI search disruption from emerging generative-AI (gen-AI) search platforms and an adverse Department of Justice (DOJ) ruling.

BofA mentioned growing usage of AI Overviews, new ad opportunities, greater appreciation of AI assets, potential search case trajectory change under the incoming Donald Trump administration, increasing value contribution by the Cloud business, and new disclosures or cost cuts under the new CFO, Anat Ashkenazi, as positive catalysts for the stock.

On the other hand, the analyst flagged potential headwinds such as a loss of search volumes due to the increasing use of ChatGPT, Meta AI, etc., an unfavorable outcome in the DOJ antitrust case, and policy changes under the new administration.

Citing adverse near-term forex impact, Post reduced his 2025 estimates for Alphabet.

On Stocktwits, sentiment toward Alphabet stock stayed ‘bullish’ (58/100), and message volume increased to ‘high.’

GOOGL-SENTIMENT.png GOOGL sentiment and message volume January 14, 2025, as of 2:32 pm ET | Source: Stocktwits

A retail follower of Alphabet stock on the platform said the stock could rise to $205 in January.

Another based their optimism on the company’s growth and attractive valuation.

Alphabet stock is up 0.9% so far this year. At last check, the stock was down 0.34% at $190.37.

For updates and corrections, email newsroom[at]stocktwits[dot]com<

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