Alphabet Inc. (NASDAQ:GOOGL) is one of the Must-Watch AI Stocks on Wall Street. On September 18, Piper Sandler reiterated the stock as “Overweight” and raised its price target on the stock to $285 from $220. According to the analysts, the latest DOJ ruling is likely going to remove any overhangs on the shares. “Google will likely be required to share some data with competitors and outright competitive exclusions disallowed. We think the market is appropriately reflecting a positive outcome for GOOGL, whi ...

Core Viewpoint - Citizens JMP analyst Andrew Boone upgraded Alphabet from Market Perform to Market Outperform with a price forecast of $220, driven by the belief that AI will positively impact Google's search capabilities [1]. Group 1: AI Impact on Search - AI is expected to expand Google's search opportunities by addressing a broader range of queries and enhancing monetization through improved user intent inference [2]. - Boone highlights that OpenAI's platforms have 800 million weekly active users, significantly less than Google's 5 billion+ active users [3]. - Google's AI Overviews, launched in May 2025, demonstrated a 10% query growth in testing [3]. Group 2: User Growth Projections - Boone projects that AI Overviews will grow from 1.5 billion monthly users in Q1 2025 to 4 billion by Q3 2025, potentially covering two-thirds of all queries by the next quarter [4]. - Assuming a sustained 10% query growth, Boone anticipates a mid-single-digit query growth tailwind for Google in Q3 2025 [4]. Group 3: Competitive Landscape - While ChatGPT offsets some growth, Boone estimates its subscriber base to be only 20 million by Q2 2025, based on OpenAI's reported $10 billion Annual Recurring Revenue [5]. - AI Overviews' wider distribution is expected to accelerate Google's overall query growth, outpacing ChatGPT's market share capture [6]. Group 4: Advertising Tools and Revenue Growth - Boone expresses optimism about Google's Smart Bidding Exploration and AI Max for Search Campaigns, which allow advertisers to focus on query intent rather than just keywords [7]. - This shift is expected to enable Google to monetize more than the historical ~20% of monetizable searches, leading to an acceleration in search revenue growth for Q2 and Q3 2025 [7]. Group 5: Financial Forecast Adjustments - For Q2 2025, Boone adjusted Alphabet's revenue forecast to $79.9 billion (up from $78.9 billion) and EPS to $2.16 (up from $2.11) [8]. - Boone previously downgraded Google due to potential antitrust penalties but notes that the risk has been largely priced into the stock, leading to the upgrade ahead of the court's decision [9].