Oppenheimer Raises Alphabet's Price Target to $220, Maintains "Outperform" Rating.

Alphabet (GOOG) has received a raised price target of $220 from Oppenheimer, up 10% from the previous $200 target. The investment firm maintained its "Outperform" rating on the stock. The average one-year target price from 18 analysts is $201.56, with a high estimate of $225.00 and a low of $185.00, indicating a 15.07% upside.

Alphabet Inc. (GOOGL) has seen a significant upgrade in its price target by Oppenheimer, with the investment firm raising its estimate to $220, a 10% increase from the previous $200 target. The brokerage maintained its "Outperform" rating on the stock, reflecting a bullish outlook on the tech giant's prospects.

The new target reflects strong consumer adoption of Alphabet's AI Mode and a positive valuation outlook for its self-driving unit, Waymo. According to a recent survey by Oppenheimer, 66% of knowledgeable respondents found AI Mode results more helpful than Google Search, while 60% rated them better than ChatGPT. Notably, 75% of ChatGPT payers preferred AI Mode, indicating a strong preference for Alphabet's AI search tools [1].

Oppenheimer also assigned a base case valuation of $300 billion to Waymo, expecting the unit to generate $100 billion in EBITDA by 2040. This valuation implies that Alphabet's core Search business is currently trading at just 6.2 times estimated 2025 EBITDA, which Oppenheimer sees as overly discounting AI-related risks [1].

The average one-year target price from 18 analysts is $201.56, with a high estimate of $225.00 and a low of $185.00, indicating a 15.07% upside potential. This consensus reflects a generally optimistic view on Alphabet's growth prospects and the potential of its AI initiatives [2].

The positive analyst sentiment is further underscored by the recent trading activity of Alphabet's stock. In the past six months, members of Congress have traded Alphabet stock 24 times, with 13 purchases and 11 sales, indicating continued interest in the company's stock [2].

References:
[1] https://www.proactiveinvestors.co.uk/companies/news/1074441/alphabet-price-target-raised-on-strong-ai-adoption-waymo-valuation-1074441.html
[2] https://www.nasdaq.com/articles/new-analyst-forecast-goog-given-outperform-rating