Stifel Analyst Mark Kelly said: Alphabet Co., Ltd. (NASDAQ:GOOG) (NASDAQ:GOOGL) became a Buy and raised the price target from $154 to $174.
The analyst said Alphabet will continue to drive massive growth through its strengths in mobile search, YouTube and programmatic advertising, while other key initiatives (cloud, hardware, AI) will leverage multi-year growth. The company is also investing in
Kelly said talk of competitive threats was overblown and hoped Google’s AI capabilities would help maintain an engaged user base. As the dominant leader in search and ad-supported online video, Google’s core business is practical and durable.
He recommended GOOGL stock given its supportive EPS rating and confidence in the company’s long-term growth opportunities.
Analyst advertising agency research shows spending is likely up 5% to 7% year-over-year, putting Google and Meta Platforms Co., Ltd. (NASDAQ:Meta).
He emphasized the importance of “premiumness,” especially in short-form videos.
Most ads are not memorable, which increases the importance of premium content compared to user-generated content.
The analyst favored CTV, particularly its premium video unit within the larger media buying platform, and acknowledged that it makes YouTube TV the fourth-largest cable network in the country.
As such, he spent more time on YT and YTTV than other CTV platforms. Google also has Google Display & Video 360, which gives consumers access to YouTube, YouTube TV, and other CTVs. However, Kelly said Meta’s lack of CTV/premium video ad inventory makes it incompetent compared to Google.
Google, on the other hand, is on the winning side when it comes to ad premiums and cookie deprecation.
Kelly expects the stock to continue to be rerated as investors become more comfortable with the company’s position in AI and its long-term upside potential from CTV.
Price action: GOOGL stock traded 0.15% higher at $156.56 at last check on Tuesday.
Also read: Potential Google-AWS deal signals Reddit’s key role in AI and brand strategy: Analyst
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