How AI Could Give Google a Boost, as Worries About Costs Drive Stock Lower [Video]

Shares of Google parent Alphabet (GOOGL) lost ground Wednesday amid concerns about the tech giant’s spending on artificial intelligence (AI) investments, despite an earnings beat. However, several analysts suggested worries about costs could be overblown, and raised their price targets for the stock on Google’s strengths, as well as early benefits from AI.

Citi analysts raised their price target for the stock to $212 from $190, while J.P. Morgan analysts lifted their price objective to $208 from $200. Alphabet shares were down close to 4% at $176.94 in intraday trading Wednesday, though they’ve still gained over 25% since the start of the year.

J.P. Morgan analysts highlighted Alphabet’s “notable strength” in search, Google Cloud, and the company’s operating income. They added that the company “remains on the offensive in GenAI,” integrating Gemini into “nearly all” Google products.

During the company’s earnings call, Alphabet CEO Sundar Pichai said in increasing spending to invest in AIinfrastructure, the company …